Behind a paywall, link here, and archived:
HOUSTON, Aug 29 (Reuters) - California's Energy Commission voted on Friday to temporarily set aside penalties for excessive refining profits that were adopted after gasoline pump prices climbed over $8 a gallon in 2022.Coincidentally, this blog was posted about twelve hours earlier, link here.
The five-year delay in implementing the penalties comes as Phillips 66's Los Angeles refinery is preparing to begin shutting production as early as next week ahead of a permanent closure.
The fact is, supply is declining faster than demand, and we need to bring them into alignment: that means slowing supply loss while aggressively pursuing the transition to zero emission vehicles," the Commission's staff said in an emailed statement. [So far, there is no Plan B to slow supply loss in California, according to ChatGPT.]
California's Democratic Governor Gavin Newsom had proposed the penalties, but has since switched direction amid worries of price spikes in 2026 after the closure of the Phillips 66 refinery and a San Francisco-area plant operated by Valero Energy Corp next year.
California refiners: link here.
Phillips 66 on track to shut down its California refinery as scheduled, or perhaps slightly ahead of schedule. No talk yet of who might buy it. ChatGPT says there are no reports of anyone looking to buy this refinery, and the state of California seems to be caught flat-footed on this development though it was announced years ago; California was very, very aware of this closure; but, failed to come up with a Plan B, except to import refined products.
Flashback to 2022:
In 2022, California gasoline prices saw significant increases, driven by events like the Russia-Ukraine war.
Prices reached historic highs, averaging $5.89 a gallon in the summer of 2022, with some counties seeing prices over $6.
The surge in California prices occurred alongside record-breaking national averages, with the U.S. average reaching $4.25 per gallon in March 2022.
In Oregon, it was not much better.
In 2022, average gas prices in Oregon peaked around $5.55 per gallon in June and remained high, with an average of $5.14 in late September before dipping slightly by year-end, although overall prices were consistently above the national average.
These elevated prices were driven by high demand, supply constraints from West Coast refinery issues, and limited crude oil transportation options like pipelines.
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