Gas prices zoomed past $4 a gallon throughout the Bay Area Friday just days after the Chevron refinery fire, adding a new financial challenge for the region's slowly recovering economy.
By Friday evening, the average price for a gallon of gasoline had climbed to $4.14 in San Francisco, $4.07 in Santa Clara County and $4.05 in the East Bay, according to the online site GasBuddy. Those prices were all higher than even Friday morning and were 5 cents to 7 cents higher than Thursday's average. And average prices have shot up about 25 cents in just one week, or roughly 6 percent.
"It's sticker shock when you see those $4 prices up on the sign," said Scott Anderson, chief economist with San Francisco-based Bank of the West. "If prices remain at this level, you will find it harder for consumers to maintain their spending on things other than fuel."
The spike in gasoline prices is unlikely to tip the national or Bay Area economy into a second recession. But it will squeeze consumers and comes just as the economy has seen some improvements in the housing market and an upswing in jobs.
There's more bad news: Prices at the pump are likely to spike higher in the Bay Area over the coming days, GasBuddy warned in its survey.
"You will see people cut back on a lot of things," said Jordan Levine, director of economic research with Beacon Economics. "Retail sales, spending on leisure activities such as going out to eat. They will cut back on
In fact, some already are. "Gasoline is just going up and up," said Taylor Carlin, a San Jose resident who was filling up at a station in San Jose where gas was selling for $4.25. "I've had to cut back. I'm spending less on other things like food."
Joe Hengst, a San Francisco resident, said he had to cancel a visit to relatives.
"We were going to drive to Montana but we can't go because of the price of gasoline," Hengst said. "We can't afford to go."
Prices jumped throughout California, which now has a statewide average of $4.02, GasBuddy reported. A gas station in the Mono County city of Bridgeport was above $5 a gallon, the survey found.
Nationally, a gallon of gas at the pump has climbed to $3.67, a rise of 34 cents since July 1.
"This is going to hurt the economy," said Joel Naroff, president of Pennsylvania-based Naroff Economic Advisors. "It will be a problem, especially since so much of the economy depends on consumer spending."
Despite the damage to the economy, economists do not expect the gas price spike to lead to a fresh major downturn.
"By itself, this will not tip the scales back into recession," Levine said.
Jon Haveman, chief economist with the Bay Area Council's Economic Institute, believes the effects could be temporary if the price spikes don't last a long time.
"It may be more of a case of spending delayed rather than spending foregone," Haveman said.
An increase in crude oil prices and problems with refineries and pipelines in the West Coast and Midwest, including Monday's fire in Richmond, are mostly to blame, analysts say.
The fire at the refinery, which produces 20 percent to 25 percent of the gasoline for Northern California, damaged the crude distillation unit. Crude Unit Number 4 provides the first step in transforming crude oil into motor fuels and other transportation fuels and products.
The damaged unit, the only one of its kind at the refinery, supplies most of the feedstock that other production units require later in the refining process.
Analysts said the damage to the refinery could push Northern California gas prices higher for the rest of 2012 and perhaps into 2013.
"The longer it lasts, the bigger the impact," Anderson said. "You will see ripple effects and eventually you will see less hiring."
Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.