Gas Price Hikes Start at Refinery - NBC 7 San Diego

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Gas Price Hikes Start at Refinery

California gas prices up again



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    Every time Frank White fills his gas tank he shakes his head.

    "I don't think anybody is happy about it," says White, referring to ever-soaring -- and ever-changing -- gas prices.

    But who's making the extra money when prices go up?

    Gasoline analyst Charles Langley says it's not the neighborhood gas station, it's the oil companies.

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    "The name of the game for them and the challenge is not to produce too much gasoline because if they produce too much the price will go down," says Langley.

    Charles Langley says price hikes often take place at the refinery level where oil companies can control the output of fuel.

    Right now seven companies operate 11 refineries. When there is a disruption of supply, prices go up. Those disruptions take place for safety reasons, fuel blend changes, even a Mylar balloon flying into the wires of a refinery.

    "This is a local California phenomenon with refineries not being able to supply the market with enough gasoline," says Langley. "And the real question is, are they not able to or is this extremely profitable to the refineries?"

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