Tesoro to resume gasoline production next month

Tesoro Corp. said yesterday that gasoline production at its Kapolei refinery should resume by mid-December.

A catalytic reformer unit that produces gasoline at the company's refinery was damaged after the Nov. 4 storm disrupted power supplies, shutting down all the units. The units that produce other types of fuels were operating again four days later.

Tesoro, the larger of Hawaii's two refineries, has an average of two weeks' supply at any given time. Chevron, the state's other refinery, has been operating normally.

Since the storm, Tesoro has been working with other suppliers, including Chevron, which operates the state's other large refinery, to cover its contracts to supply gasoline. Hokama said yesterday that Tesoro so far has not had to import any gasoline.

Due to the damaged unit, production of all types of fuel at the Tesoro refinery has been reduced from 95,000 barrels a day to between 70,000 to 80,000 barrels a day. Other units at the refinery produce jet fuel, fuel oil and ship fuel.

Hokama declined to speculate on any impact the outage might have on Hawaii gasoline prices.

"When we buy a finished product, naturally we have to buy it at a higher price than if we would make it ourselves," said Hokama. "How that translates to street price a month from now really depends on what's happening in the marketplace and everyday competition."

Gasoline prices across the country have hit a national average of $3.11 per gallon, according to AAA and the Oil Price Information Service, and may rise again in coming weeks in the wake of crude oil prices reaching nearly $100 a barrel.