Will Benicia port fire cause gas prices to go up?
The Valero refinery and other companies that rely on the Port of Benicia are assessing the situation after last weekend's blaze.
(Image courtesy City of Benicia/Graphic by Solano NewsNet)
By: Solano NewsNet staff
A four-alarm fire that erupted at the Port of Benicia on Saturday could spur a new round of inflation that may cause drivers to pay more at the pump.
The fire took out a critical conveyor belt used by Valero, an energy company with a refinery in the Solano County port city.
That issue could cause gas prices to increase over the coming weeks, according to energy experts and economists, saying the volatile price of fuel is particularly sensitive to supply chain issues.
That problem could be exacerbated by California’s mandate that automotive fuel providers switch to a cleaner version of gas, known as the “summer blend.” That blend is said to burn cleaner in the summer months when many Californians hit the road, which is supposed to help ease car pollution. Refineries have until May 1 to switch to the summer blend of fuel.
In an interview with KPIX-TV (Channel 5), Benicia’s deputy city manager said officials were still waiting on inspectors to provide a damage assessment after the fire.
“If the port is out of commission and there’s a challenge to bringing in crude to that refinery, that will absolutely have an impact [on prices],” Mario Giuliani with the City of Benicia said in the interview. “Valero certainly supplies a lot of California’s gasoline and, if they’re impacted in being able to process crude, that’s going to be a challenge for this region.”
City officials are still waiting to determine how long the port will be unavailable.
Officials with the Valero refinery were not available for comment. In a Facebook post, Benicia city officials said Valero and another company, Amports, were drafting and submitting reports to the city, the U.S. Coast Guard and the California State Lands Commission and might be able to resume using non-damaged portions of the port once those reports are approved.
Gas prices in California and elsewhere are somewhat linked to the price of Brent crude. The commodity dropped in price on Monday, though market analysts said it was more due to lockdown concerns in China than the fire in Benicia. West Texas Intermediate crude, another commodity that trails the price of gas, also fell during the trading day on Monday.
Shares in Valero saw a sharp decline from $103 to $101 at the start of the trading day on Monday. The stock recovered slightly in midday trading, though it ended the trading day down 2.25 percent to close at just over $100 a share.
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