Calif. gas prices could spike even higher after India slashes exports

California gas prices have risen above $6 a gallon as global oil markets are disrupted by war involving Iran and shipping disruptions in the Strait of Hormuz. The route carries about 20% of the world’s oil supply, contributing to higher prices in California for months. A separate supply issue is emerging because refiners in India are cutting back alkylate production, a key blending component in California’s gasoline blend. California has become more reliant on overseas alkylate. Without enough alkylate, California may struggle to produce its clean fuel under strict fuel requirements. A waiver of carb requirements may be needed to prevent further price increases over the next three to five weeks.

"California has a problem "boiling in the background" because refiners in India are cutting back production of alkylate, Patrick De Haan, the head of petroleum analysis at GasBuddy, told SFGATE. The chemical is a key blending component in the state's gasoline blend. He said California has become "more reliant" on overseas production of alkylate."

""The problem is some refiners in India are scaling back production of alkylate to maintain supplies of natural gas liquids and that is negatively going to impact production," De Haan said. "California in the weeks ahead could face some challenges finding enough alkylate to blend into its gasoline unless the state waives the carb requirements here sometime soon.""

"California has some of the nation's strictest fuel requirements, and without alkylate, the state can't produce its clean fuel, according to the American Fuel & Petrochemical Manufacturers. De Haan described the chemical as a "high octane component of gasoline that burns cleaner" and "can withstand warmer temperatures and has lower emissions.""

"The shortage is not yet having a major effect on California gas prices, but if current conditions persist over the next three to five weeks, prices could climb to a "fairly high level," he said. If the situation worsens, De Haan said California Gov. Gavin Newsom may have to consider issuing a waiver for the state's"

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