What's behind the record Calif. gas prices?

california gas prices
California gas prices, as of 10/07/12
CBS News

(CBS News) LOS ANGELES - The price of gas in California set another all time high overnight. The state average hit $4.66 per gallon, breaking the old record set just one day earlier.

The national average is a full 85 cents less.

For California drivers, Sunday brought yet another jump in gas prices. The statewide average went up a nickel overnight. It has happened every day for the past week.

Drivers said Sunday they have never seen anything like it, and Jeffrey Spring of AAA said they're right.

"In a week, it's gone up about 52 cents. That is absolutely unprecedented," Spring said.

In part, it is due to California's efforts to protect its spectacular natural environment. Air pollution regulations require special summer and winter gasoline blends in the state.

Refineries are making that seasonal switch now, but that reduces supply, which was already tight after a fire in August shut down part of a Chevron refinery at Richmond, near San Francisco.

Then, last week a power failure temporarily knocked out an Exxon refinery at Torrance in Southern California.

"The Richmond refinery and the Torrance refinery account for about 25 percent of the production in California, because they're two of the biggest refineries we have. It's easy to see why the wholesalers panicked," Spring said.

As wholesalers raised prices, drivers started to panic as gas seemed to get more expensive, and many say they don't see it going down anytime soon.

State energy officials are trying to reassure drivers that price spikes like this don't last.

"This is a very dramatic one, but we do know that what goes up does come down, and often quite quickly," said Alison Roberts, a spokesperson for the California Energy Commission.

In fact, the wholesale price has already started coming down. On Friday, it dropped 55 cents per gallon on the spot market in Los Angeles.

But gas station owners who paid thousands more to fill their tanks in the past week are likely to keep retail prices up until they get their money back. So relief for California drivers is still days away.

  • John Blackstone
    John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.