Image From ..sfgate.com

Once again, refinery problems are biting California motorists. A fire at Chevron's Richmond, CA refinery Monday, the third-largest refinery in the state with production capacity of 245,000 barrels per day (bpd) forced the closure of the refinery and damage assessment remains under way.

Earlier this year a variety of mishaps and maintenance problems shut down 4 of California's 12 refineries pushing gasoline prices to $4+ per gallon and it appears that Californians in some cities should be ready for a return to prices near that level at least temporarily.

In addition to the Chevron Richmond refinery, a Valero refinery in Benicia, CA closed last month. With capacity there at 132,000 bpd, the combined production represented by these two refineries amounts to 377,000 bpd and that will likely be felt along the entire West Coast, not just in California.

As a result of the Richmond refinery fire, the spot (wholesale / pre-tax) price of gasoline spiked by 24.5 cents per gallon today in Los Angeles, but that does not necessarily translate into the same increase in retail gasoline prices.

In a report from Bloomberg, Andy Lipow, president of Lipow Oil Associates in Houston said: "We don't know how long the crude unit will be down and they may have had to shut down other refining units as well. I expect that if several units shut gasoline prices will spike at least 10 cents today."

The Richmond refinery is 110 years old according to Chevron. It is built on a peninsula of hills rising from San Francisco bay and when the fire was raging, the flames and plumes of smoke could be seen from 10 miles away.