SACRAMENTO, California — California will face an in-state gasoline production shortage through November due to planned and unplanned maintenance at the state’s refineries, a top regulator announced Tuesday.
The production crunch will come at the same time when the state has historically been vulnerable to price spikes at the pump, though stronger inventories this year are a positive signal that the market may avoid acute price increases.
What happened: Tai Milder, the director of the California Energy Commission’s Division of Petroleum Market Oversight, sent a letter to Gov. Gavin Newsom and state legislative leaders Tuesday warning of the coming reduction in gasoline production. Market activity suggests that gasoline traders are aware of the coming crunch as spot market forward pricing is elevated for October and November delivery, he said.
As production slows, gasoline price stability will depend on petroleum companies maintaining adequate inventories, ordering sufficient imports, and avoiding reactive spot market behavior, according to Milder, who wrote that his agency would engage with the state’s companies to drive that message home.
