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Chevron Corp. plans to operate its California refinery “normally” amid a worker strike that began just after midnight on March 21, potentially limiting the impact on gasoline prices in the state.
The company will operate the Richmond refinery in the San Francisco Bay area without 500 members of United Steelworkers (USW) Local 5 until there is a resolution of the contract dispute that precipitated the walkout. The strike comes as AAA said California gasoline prices hit a record high of an average $5.855 a gallon for regular fuel.
“Assuming they can run the refinery without the workforce at the rates they were operating at before, it should not affect prices at the pump,” said Robert Campbell, head of oil products research at London consultancy Energy Aspects Ltd.
The refinery can produce about 90,000 barrels a day of gasoline when it runs normally, so if it were shut or unable to run normally because of a reduced labor force, gasoline prices could spike higher. California gasoline prices, the highest in the U.S. already, have kept increasing even as the national average has dropped every day since March 11, except for March 13 when there was no change.
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“Chevron Richmond is fully prepared to continue normal operations to safely and reliably provide the products that consumers need,” the company said in a statement. “We anticipate no issues in maintaining a reliable supply of products to the market.”
The previous contract between Chevron and the local union expired Feb. 1, and members have since been working on a rolling 24-hour extension of the previous contract. The USW encouraged Chevron to return to the bargaining table, but it refused, forcing workers to give notice of their intent to begin an unfair labor practice strike on March 21 at 12:01a.m., the union said in a statement.
“It’s disappointing that Chevron would walk away from the table instead of bargaining in good faith with its dedicated workforce,” Mike Smith, chair of the USW’s National Oil Bargaining Program, said in a statement.