Regular gasoline is nearing $4 a gallon and could hit $5 a gallon!
LOS ANGELES, Kalifornia - March 15, 2011 - For Kalifornia drivers, $4-a-gallon gasoline is right around the corner after an 8-cent increase in the average price during the last week. Can $5 be far behind?
Many analysts are predicting a sharp rise in energy prices, particularly on the west coast, as refiners scramble to replace more than 1 million barrels a day in refined fuels production lost because of Japan’s earthquake and tsunami.
"This will most likely test whether consumers are going to be willing to pay $5 per gallon for gasoline and diesel fuel in the U.S," said consultant Bob van der Valk, who tracks fuel prices for 4Refuel, Inc., which helps companies buy fuel for their fleets more economically.
Compounding the loss of refineries, he said, "Japan will have to supplement their nuclear energy power production with coal, natural gas and oil-fired power plants" as that country's nuclear crisis continues to unfold.
Experts say west coast refineries are the most likely supply source for the Japanese, which could reduce the amount of gasoline and diesel fuel available for U.S. drivers and businesses, possibly boosting prices that were already rising in response to higher oil costs.
On Monday, Japanese refiners were assessing their import needs for gasoline, kerosene, diesel and fuel oil, according to Platts, an energy information company.
Platts reported the shutdown of three refineries owned by JX Nippon Oil & Energy Corp. in Sendai, Kashima and Negishi as well as two in Chiba owned by Cosmo Oil Co. and Kyokuto Petroleum Industries; the ExxonMobil refinery in Kawasaki was operating at reduced capacity.
In all, nearly a third of Japan's 4.52 million barrels of daily production was out of commission, Platts said.