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California Oil Refiners Accused Of Gas Price Gouging By Consumer Group

SAN GABRIEL VALLEY TRIBUNE
http://www.dailynews.com/business/20151013/california-oil-refiners-accused-of-gas-price-gouging-by-consumer-group

A consumer advocacy group testified Tuesday that California oil refiners are gouging motorists by hiking retail gasoline prices well above the wholesale price of gas traded within the oil industry.

In testimony before the California Energy Commission’s Petroleum Market Advisory Committee, Consumer Watchdog President Jamie Court said the gap between retail and wholesale prices has never been greater.

“All levels of the oil industry are raking it in while consumers are shelling it out to the tune of $6 billion more than U.S. drivers spent since February,” Court said in a statement. “The lack of competition in the market is the result of four refiners controlling 78 percent of the state’s supply and these companies using their market power to drive up prices and drive away competition.”

Consumer Watchdog’s analysis of state and industry data shows that California’s oil traders are buying finished gasoline at $1.20 less per gallon than they’re selling it at the pump — an unprecedented margin. Typically, the wholesale price has averaged 77 cents per gallon since 2000.

On Tuesday, the average price for a gallon of regular in Los Angeles County was $3.02, down 6 cents from the previous day, down 34 cents from a month earlier and down 60 cents from a year ago, price tracker GasBuddy.com reported.

Prices in San Bernardino County were lower, with regular averaging $2.93 on Tuesday. That was down 2 cents from Monday, down 36 cents from a month ago and down 66 cents from a year earlier.

Consumer Watchdog testified that California’s gasoline price spikes were also partially the result of chronically low inventories that were created by the industry itself in order to drive up prices. And even as inventories evened out during certain periods, oil refiners used their contractual leverage over their branded stations to keep gasoline prices artificially high.

The organization is calling for greater transparency in the oil industry. It said the California Energy Commission should receive and publish prices along the entire supply chain, refinery schedules and outages, California refining profits and detailed import and export data.

 

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