Fire sends diesel price to record high
By Dale Kasler and Dan Nguyen -- Bee Staff Writers
Published 2:15 am PDT Friday, August 5, 2005
Story appeared on Page A1 of The Bee
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In the latest fuel price spike to hit California, diesel rose to record levels Thursday in the wake of an El Segundo refinery fire.
The statewide average price for diesel jumped 5 cents to a record $2.81 a gallon, according to AAA. Record highs were also reported in 24 of the 25 metropolitan areas surveyed each day by AAA. The exception was Redding, where Wednesday's $2.79 price is the record.
In Sacramento, diesel was selling for $2.78 a gallon, up 6 cents from the day before. The costliest diesel on average in California was $2.90 in San Luis Obispo.
Diesel, which fuels trucks, farm equipment and other machinery, accounts for about 28 percent of California's market, according to the California Energy Commission. High diesel prices could filter throughout the broader economy as costs get passed on to consumers.
"What's bad about it is the people who pay for it are the people at the grocery store," said trucker Paul Gilli, who was refueling en route to Oregon at the Sacramento 49er Travel Plaza at the West El Camino Avenue exit of Interstate 80.
"These prices are as high as I've ever seen them," he said. "I pulled in and I couldn't believe it."
The problem stems from high oil prices, plus a July 20 fire that curtailed diesel production at the Chevron Corp. refinery in El Segundo. Chevron, in a prepared statement, said repairs will take a week and a half.
Although the El Segundo plant supplies Southern California, higher prices have spread across the state. That's because wholesale traders began diverting supplies from Northern California to take advantage of the high prices down south, said David Hackett, an industry consultant at Stillwater Associates in Irvine.
Rob Schlichting, spokesman for the California Energy Commission, said the higher prices have spread to Arizona and Nevada, which depend heavily on fuel produced in California. Prices hit a record $2.74 in Reno on Thursday, according to AAA.
Statewide diesel production fell 12.5 percent last week from the week before and was 6.9 percent below year-ago levels, according to the commission.
"It's a really tight market right now, particularly for diesel," Schlichting said.
The U.S. average diesel price was $2.43 a gallon on Thursday.