Walkout at Chevron oil refinery will not further raise fuel prices

A strike that began overnight at a large Chevron Corp oil refinery outside San Francisco will not add to record fuel prices as long as replacement workers remain at the facility's controls, a fuel price analyst said.

The walkout by more than 500 United Steelworkers (USW) members at the 245,000 bpd Richmond, California, plant came after its members rejected a Chevron contract proposal over the weekend. The plant is the second-largest in state and a major supplier of gasoline, jet fuel and diesel fuel.

Its managers began taking over operations staffed by union workers on Sunday evening, Chevron said last night.

U.S. gasoline futures jumped 3% in early Monday trading in New York on reports that European Union officials are weighing a ban of Russian petroleum imports for its invasion of Ukraine, said Devin Gladden, a spokesperson at motorist group AAA.

The Richmond plant strike is unlikely to lift prices as long as operations are unaffected, Gladden said. That will change with any disruption to the plant's gasoline and diesel units until operations return to normal, he added.

Chevron staff began replacing union workers at the controls of production units on Sunday evening ahead of the union's strike deadline.

The second-largest U.S. oil producer is committed to continuing to negotiate toward an agreement, spokesman Tyler Kruzich said. No plans for a resumption of talks have been set.

California has some of the highest fuel prices in the nation with a gallon of unleaded regular gasoline on Monday selling for $5.86 and a gallon of diesel for $6.26, according to 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, USW Local 5 First Vice President B.K. White told Reuters on Sunday.

(Reporting by Gary McWilliams and Erwin Seba in Houston Editing by Marguerita Choy)

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