Gasoline Refinery Stocks Reach Lowest Point In Nearly One Year, Driving Newsom Call for Legislation Requiring CA Oil Refiners To Maintain Minimum Inventories, SB 950, Says Consumer Watchdog

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Aug 29, 2024, 15:27 ET

SACRAMENTO, Calif., Aug. 29, 2024 /PRNewswire/ -- State data shows that refinery gasoline stocks, specifically the amount of California blending components on hand at oil refineries, has shrunk to its lowest point in nearly one year, creating the need for a minimum gasoline inventory requirement.

In addition, reports of maintenance at a Bay Area refinery are creating concern about inventory depletion and a recurring pattern of late summer inventory drops leading to gasoline price spikes.

This week Governor Newsom and Senator Nancy Skinner introduced SB 950, which allows the California Energy Commission to set a minimum resupply and inventory requirement on California's oil refiners.

"With gasoline stocks slipping to their lowest point during 2024 and a Bay Area refinery having maintenance issues, Californians need these new protections against price spikes that come when oil refiners do not have adequate inventories on hand," said Jamie Court, president of Consumer Watchdog. "There is great urgency in passing SB 950 to avoid the price spikes that come when California gasoline inventories are too low."

The Energy Commission reported recently that oil refiners are utilizing only 55% of their storage capacity.

The Commission has determined that 15 days of gasoline inventory is the sweet spot for preventing gasoline price spikes. When oil refiners' supplies dip below 15 days, price spikes and profit spikes ensue.

The California Energy Commission and newly created Division of Petroleum Market Oversight provided valuable analysis at a recent workshop on inventories and gasoline prices. Lack of enough days of gasoline supply precipitated price spikes in late summer and early fall 2022 and 2023, according to the CEC.

"Four refiners make 90% of the gasoline in California and when they choose to squeeze us by lowering inventories gas prices and profits spike," said Court. "The state needs the power to force them to keep minimum inventories that will prevent gasoline price and profit spikes."

SOURCE Consumer Watchdog