Gas prices going up in Merced and around the state – and aren’t slowing down

Gas prices are on the rise in Merced, where the average on Thursday came in at 58 cents higher than a year ago, according to AAA of Northern California.

In the Merced area, prices rose by 0.7 cents in the past week to an average of $2.76 per gallon of unleaded gasoline, according to AAA. Prices in Modesto rose by less than a cent to an average $2.62 a gallon.

AAA released its monthly gas price report Tuesday. Statewide, prices average $2.89, the second-highest price in the country behind Hawaii. For comparison, California prices are 50 cents higher than a year ago.

The climbing prices come as problems at California refineries led to production declines in each of the past three weeks, according to AAA.

Chevron shut down refineries in El Segundo and Richmond “due to unplanned maintenance and problems with production equipment,” the report said.

National gas price tracker GasBuddy.com said gas prices had reached the “bottom” nationwide and will start climbing as refineries throughout the United States start gearing up to produce cleaner-burning, more-expensive spring/summer blends of gasoline.

For perspective, GasBuddy projected that the nation’s daily gasoline bill will rise from the current $788 million to as much as $1.1 billion by Memorial Day.

“While I remain optimistic this year will not bring a running of the bulls, we’re likely to see some major increases at the gas pump as the seasonal transition and refinery maintenance get underway,” said Dan McTeague, senior petroleum analyst for GasBuddy.

California’s strict emissions standards require in-state refineries to produce Golden State-specific warm-weather gas blends.

Across the nation, GasBuddy predicted gasoline prices will rise 35 to 75 cents per gallon between now and early spring, with prices likely peaking in May.

GasBuddy said major cities, including Los Angeles, can expect $3 per gallon gasoline “very soon.”

Motorists throughout the nation have enjoyed unusually low gasoline prices for more than a year, a byproduct of ample U.S. fuel reserves, low crude oil prices and increased domestic fuel production.

In addition, gas prices defied historic trends in 2016. At-the-pump prices were relatively flat throughout last summer, when costs typically swell during the vacation driving season.

Red flags went up Nov. 30, when the Organization of the Petroleum Exporting Countries announced an agreement to cut oil production by 1.2 million barrels a day in 2017.

AAA said those cuts have had an effect just weeks into 2017. On Monday, OPEC’s Monthly Oil Market Report showed that participating countries had implemented a reduction of 890,000 barrels of oil per day in January.

This story was originally published February 16, 2017 at 5:18 PM with the headline "Gas prices going up in Merced and around the state – and aren’t slowing down."