Southern California gas prices may spike soon. Here’s why

A widespread Southern California Edison power outage early Monday forced the shutdown of the Torrance refinery, raising concerns that gasoline prices throughout Southern California may see a temporary spike.

The power outage at 3:31 a.m. cut electricity to 57,582 customers in Gardena, Hawthorne, Inglewood and parts of Los Angeles and Torrance, said Robert Laffoon-Villegas, an Edison spokesman. The utility restored power to all but 1,600 about an hour later, Villegas said.

“We’re still looking at the cause. It’s still under investigation,� Laffoon-Villegas said.

The outage was enough to cut production temporarily at the Torrance refinery, which PBF Energy bought from Exxon Mobil in July. It will take “multiple days� to return the plant to full service, said Jeffrey Dill, president of PBF Energy Western Region.

“All of our safety systems were operational,� Dill said. “We’re working to get all the systems up and running. It is definitely something that does not happen in a day.�

The refinery has endured a string of ups and downs over the last 18 months, following an explosion in February 2015 that destroyed a pollution control system. That incident led the plant to operate at less than 20% of its normal capacity for months while awaiting repairs.

That lengthy outage sent gasoline prices in Southern California to as much as $1.50 above the rest of the nation, more than twice the usual gap. Torrance produces 10% of the state’s refined capacity and 20% of Southern California’s.

Bob van der Valk, an independent fuels price specialist, said the outage Monday caused an immediate 10-cent increase in spot market prices in Southern California, which could lead to a temporary increase in retail prices.

Gas prices this week were up just a penny more than last week, but that might change quickly, said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California.

“This is one of those things that probably tends to set the market off more than is warranted,� Montgomery said. “Hopefully, it will be a short-lived effect.�

Gas prices overall are expected to decline over coming weeks as refiners change to the winter blend of gasoline by Nov. 1, which does not carry the same environmental requirements as California’s summer blend of gas.

[email protected]

For more energy news, follow Ivan Penn on Twitter: @ivanlpenn

ALSO

Column: Why does Wells Fargo’s CEO still have a job?

Is the Federal Reserve politically biased? Look at its track record

Home prices soar near USC as buyers rush to ‘one of the best neighborhoods left’

UPDATES:

2:05 p.m.: This article was updated to clarify the Edison customers hit by a power outage.

The original article was published at 10:40 a.m.