California Governor Relaxes Smog Standards

With drivers facing $5 per gallon gasoline, the state is allowing refineries to start producing winter-blend fuel a few weeks early.

October 12, 2012

SACRAMENTO - Faced with $5 per gallon gasoline, California Gov. Jerry Brown directed state regulators to let refineries begin production of winter-blend fuel now, Bloomberg News reports. California gas prices have soared 22% higher than the national average in the past few weeks.

This week, the California Air Resources Board gave approval to refineries to shift to making winter-blend gasoline, which can be manufactured faster than the summer blend. Typically, winter-blend fuel is sold after Oct. 31. The switch should bump California??s fuel supply between 8% and 10%.

Because California lacks access to oil pipelines available to other states, the state is dependent on its own refineries. Retail prices started to climb when several refineries had to lower production because of a fire, power failure and pipeline contamination.

"This is probably going to continue to recur because California has just enough refining capacity to supply its demand, but only if everything is running well," said John R. Auers, senior vice president at Turner Mason & Co.

Without less available fuel, some stations shuttered their pumps. For example, Costco Wholesale Corp. shut down its Southern California stations because it couldn??t restock.

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