Just as speculation can shake up the financial markets, it can also cause a big impact on prices at the gas pump. One oil analysts are pointing the finger at Chevron for causing this week's price turmoil by not disclosing the extent of damage at the Richmond Refinery, how much production has been reduced, and how long it will take to get back up to full production.
Price increases are happening every day. Almost in the blink of an eye, "I actually was up the street and it was $4.15," Cassandra Hollingsworth said. "I went into the store, I came out, and it was $4.21. So within an hour, it went up six cents."
Gas station managers tell us they're getting emails daily to raise their prices. At a Shell station in San Jose, the increase has been a consistent six cents per day this week, except for Wednesday when two increases came through for a total of 12 cents.
Oil analysts say Chevron is contributing to the price spike by not indicating when the Richmond Refinery can restore operations.
"They're not saying a word about a time line or a projected time line on when they can expect to be able to return to whether it's partial production or full production at that facility, and all that we can do is in the meantime is speculate," Gregg Laskoski of Gasbuddy.com said.
Meanwhile, Chevron spokesperson Sean Comey spoke to ABC7 News about the company's current fuel production, "Other parts of the refinery are continuing to operate. We are continuing to manufacture transportation fuels, although at a reduced rate from our normal operating capacity."
The daily price spike is also hurting small businesses such as Valley Heating and Cooling, "Well, we have 22 vehicles and it averages from $9,000 a month to $6,000 a month, so the fluctuation in the gas really makes a difference to our bottom line," said Valley Heating and Cooling President Cindy Faulkner.
Valley Heating is absorbing the added cost for now to stay competitive in a tough economy. For individual drivers, though, the day-by-day increases are unsettling and create expectations that the worst isn't over, "I'm definitely braced for $5 gasoline, but I want them to bring back the HOV lane for the Prius stickers, not just for the electric Priuses," Prius owner Gina Pye said.
$4 a gallon gasoline also has another impact. Chief Economist Scott Anderson at Bank of the West in San Francisco says that when it reaches that level, consumers start to curb discretionary spending, which has a tremendous impact on restaurants and retailers in a recovering economy.
