Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. are beginning to shut pumps as the state’s oil refiners started rationing supplies and spot prices surged to a record.

Valero Energy Corp. stopped selling gasoline on the spot, or wholesale, market in Southern California and is allocating deliveries to customers. Exxon Mobil Corp. is also rationing fuel to US West Coast terminal customers. Costco’s outlet in Simi Valley, 40 miles northwest of Los Angeles, ran out of regular gasoline yesterday and was selling premium fuel at the price of regular.

The gasoline shortage “feels like a hurricane to me, but it’s the West Coast,” Jeff Cole, Costco’s vice president of gasoline, said by telephone yesterday. “We’re obviously extremely disheartened that we are unable to do this, and we’re pulling fuel from all corners of California to fix this.”

Spot gasoline in Los Angeles has surged $1 a gallon this week to a record $1.45 a gallon premium versus gasoline futures traded on the New York Mercantile Exchange, data compiled by Bloomberg show. That’s the highest level for the fuel since at least November 2007, when Bloomberg began publishing prices there. On an outright basis, the fuel has jumped to $4.3929 a gallon.

Gasoline at the pump gained 8.3 cents to $4.315 a gallon in California yesterday, according to AAA.com, 53.1 cents more than the national average of $3.784. In Los Angeles the price was $4.347. Gasoline futures for November delivery on the Nymex rose 14.34 cents to settle at $2.9429 a gallon, after falling yesterday to a 10-week low. Retail price movements tend to lag behind those of futures.

“Product supply in California has tightened, especially in Southern California, due to refinery outages,” Bill Day, a Valero spokesman at the company’s headquarters in San Antonio, said by e-mail.

Exxon’s Torrance refinery is restoring operations after losing power Oct. 1. Phillips 66 is scheduled to perform work on gasoline-making units at its two California refineries this month, two people with knowledge of the schedules said. A Chevron Corp. pipeline that delivers crude to Northern California refineries was also shut last month due to elevated levels of chloride in the oil.

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Editor's Note: They're hear! The gas lines of the 1970s...Great job environmentalists...So, are we on our way to being a Third World country yet?


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