Chevron California Refinery Workers Strike; Fuel Prices Seen Unaffected

Picketers marching at the gates of a large Chevron Corp oil refinery outside of San Francisco said on Monday they could endure a lengthy walkout to press claims for a new labor contract.

But the plant was continuing to operate normally and fuel supply and prices are not expected to be impacted, gasoline analysts said.

More than 500 United Steelworkers members at the 245,000 barrel per day Richmond, California, facility went off the job early on Monday after members rejected a Chevron contract proposal over the weekend.

The walkout is the first in more than 40 years at the plant, which is a major supplier of gasoline, jet fuel and diesel fuel. The last strike, in 1980, continued for five months, said United Steelworkers union local 5 First Vice President B.K. White.

"We are waiting for Chevron to come to the table," White said in an interview outside the gates as truck drivers blared their horns in support. The union is prepared to "stay put until we get a fair and equitable contract," he added.

NO IMPACT AT THE PUMP

California, which has some of the highest fuel prices in the nation, is unlikely to feel an impact, said fuel analysts. Wholesale California gasoline prices fell 21.5 cents and 13 cents per gallon, respectively, in the Los Angeles and San Francisco markets on Monday, traders said.

A gallon of unleaded regular gasoline in the state on Monday sold on average for $5.86 and a gallon of diesel for $6.26, according to motorist group AAA.

"A strike at a refinery is not necessarily a catastrophic event in terms of prices and supply. Motorists, at least at this point, are not likely to notice anything," said Patrick De Haan, head of petroleum analysis at GasBuddy.

Chevron is continuing to operate the facility and remains willing to engage in further discussions with the union, said spokesman Tyler Kruzich.

The company began replacing union workers at the controls of production units on Sunday evening with managers, technical staff and others.

NO NEW TALKS SET

No plans for a resumption of contract talks have been set.

"The strike potential scares folks, but in reality and in the short term, it shouldn't affect anything," said one Los Angeles fuel trader, who spoke on condition of anonymity to preserve business relationships.

"It's different here in California where strikers don't get violent," the trader said. "Refinery management should be able to operate the refinery at least as well as union crews."

Still, U.S. gasoline futures jumped 4.5% in New York on reports that European Union officials are weighing a ban of Russian petroleum over the country's invasion of Ukraine, said Devin Gladden, a spokesperson at motorist group AAA.

The USW union local at the plant has asked for a 5% pay increase above that agreed last month under a national labor agreement because of the higher cost of living in the San Francisco Bay Area.

It also wants the company to add staffing to reduce the 60-70 hours that union members must sometimes work, the USW's White told Reuters.