Today, senators from California, Washington and Oregon joined our call to investigate refineries, asking the Department of Justice to comb through California refineries one by one to see whether market manipulation or false reporting by oil refineries had something to do with record $5 dollar a gallon prices at some California gas stations last month and near record prices earlier in the year.
“We are requesting a Department of Justice investigation of possible market manipulation and false reporting by oil refineries which may have created the perception of a supply shortage, when in fact refineries were still producing,” wrote six senators, including California Senators Dianne Feinstein and Barbara Boxer.
The senators cited the same report we did by McCullough Research concluding that price spikes in May and October happened while crude oil prices were declining, and inventories were increasing, possibly in conjunction with misleading market-making information.
The Senators called on Attorney General Eric Holder to use existing authority to prevent and prosecute fraud and collusion, and to draw upon the Federal Trade Commission to prohibit fraud or deceit in wholesale petroleum markets, and on the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Energy Regulator Commission to excercise their power to prevent the use of any “manipulative or deceptive device or contrivance."
Consumer Watchdog wrote California Attorney General Kamala Harris on November 15 calling for a criminal investigation of possible market manipulation or false reporting by refineries to drive up the price of gas to the highest in the nation, based on the McCullough report.
Between the Justice Department and its collaboration with other agencies in Washington and the California Attorney General on the West Coast, consumers should be getting some answers about why wild gyrations in the price of gas cost them $1 billion dollars extra in a short span of time in October, adding up to a 66-cent-per-gallon windfall for oil companies, or about $25 million a day, according to the McCullough report.