UPDATE 1-California gasoline prices ebb at last after record run

* Prices ease, but another refinery glitch threatens

* Congressman Waxman urges FTC to probe price rise

(Adds Waxman asking FTC to investigate price rise, adds detailson California consumption)

Oct 10 (Reuters) - Record-high retail prices for gasoline inCalifornia began to ease on Wednesday, receding from anunprecedented rally to nearly $5 a gallon, even as furtherrefinery disruptions threatened to slow the decline.

The average price of a gallon of regular gasoline in thestate dipped by a half cent to $4.666, according to the AAA FuelGauge website, easing from the previous day's record. A dramaticspike in prices began just over a week ago.

While wholesale prices had begun falling last Friday, ittook some time for retail rates to follow. Prices are still upmore than 45 cents from a week ago, and the premium thatCalifornia's motorists are paying versus the U.S. averageremains unusually wide at about 86 cents.

In Los Angeles, where shortages had been so acute that ahandful of service stations stopped selling fuel, average pricesremained above $4.90 a gallon. That was among the highest levelsin the state, said the AAA, an automobile club. Prices hadtopped $5 a gallon at many gasoline stations.

Retail prices surged by more than 50 cents a gallon lastweek and wholesale premiums rose by almost a dollar after aseries of refinery mishaps pinched supplies.

Market sources said a possible "short squeeze" that cameabout when a big refiner was forced to buy fuel on the spotmarket may also have been a factor.

The spike prompted Henry Waxman, the ranking member of theHouse of Representatives' Energy and Commerce Committee, to askthe chairman of the Federal Trade Commission to investigate thecauses. In a letter to Jon Leibowitz on Tuesday, Waxman said thecommon explanation for the increase was a gasoline supply crunchresulting from refinery shutdowns.

But Waxman said periods of tight gasoline supplies requirevigilance because of opportunities for market manipulation,especially when only a few players hold most of the marketshare. "When Los Angeles consumers see their gasoline pricesskyrocket by 50 cents per gallon over the course of one week,something is wrong," Waxman said in the letter.

The price increase, the biggest in any single state since2005's Hurricane Katrina, according to the AAA, has unnerveddrivers in car-loving California and led the state's two U.S.senators to call for a federal investigation of possiblemanipulation in the gasoline trading markets.

Average Californian households burn about 100 gallons (378liters) of gasoline a month at a cost of about $466 atWednesday's prices, the AAA said.

The price spike eased after California Governor Jerry Brownon Sunday ordered that service stations be allowed to beginstocking "winter-blend" fuel three weeks ahead of schedule,allowing refiners to start making the cheaper blend.

Wholesale prices dropped by 60 cents a gallon on Monday, andanalysts said a sharp fall in retail prices would follow withinabout a week, barring further market disruptions.

But on Tuesday, wholesale prices in Los Angeles jumped by 26cents a gallon after Exxon Mobil Corp said in aregulatory filing it would move ahead with planned work on itsnearby Torrance refinery for the rest of October.

A power failure at the plant tightened supplies andcontributed to last week's price surge.

Meanwhile, Chevron Corp said a key unit at itsRichmond, California refinery, which suffered a major fire inAugust and contributed to the supply squeeze, would remain shutthrough the end of the year - the long end of estimates byindustry sources.

(Reporting by Jonathan Leff in New York and Timothy Gardner inWashington; Editing by Dale Hudson and Jeffrey Benkoe)

((jonathan.leff@thomsonreuters.com)(+1 646 223 6068)(ReutersMessaging: jonathan.leff.thomsonreuters.com@reuters.net))