West Coast motorists prepare: gasoline prices will likely start or continue moving higher in the upcoming days and perhaps weeks as supply has tightened considerably.
Wholesale gasoline prices, a significant factor in which direction retail prices move, have risen sharply in the last week as the California Energy Commission highlights supply tightness in its Weekly Fuels Watch Report.
According to the CEC, supplies of non-California gasoline (generally for use in Oregon and Washington states) remains very tight and sits a whopping 15.3% lower than where inventories were a year ago. California reformulated gasoline supply was down 10.1% versus last year. And the picture isn't great- extensive refinery maintenance on the West Coast will likely mean these areas may buck the national trend.
Total gasoline production from California refineries remained 5.8% lower than last year, adding insult to injury, meaning the situation may not immediately improve.
Already, according to some sources, there are some suppliers reporting that they have little gasoline left after their stations are supplied in storage tanks in Oregon. Usually, after meeting contractual obligations, refiners sell remaining gasoline to independent stations. When supply gets tight, there is less gasoline available for independent stations, meaning some stations not part of a large chain or branded may see supply problems.
Just since last week, wholesale gasoline prices in some areas of California have risen nearly 40-cents per gallon. In Oregon and Washington, some places have seen wholesale values rise 65-cents since their late-April values.
Due to these issues, motorists along the West Coast should expect to continue seeing rising gasoline prices for some time until supply begins to build.