Sacramento, CA – The state’s petroleum watchdog has issued its annual report validating claims that Californians have overpaid tens of billions of dollars at the pump over the last decade due to the consolidated gasoline refining industry, an estimated $59 billion in overcharges from 2015 thru 2024.
The Division of Petroleum Market Oversight, created by the special session legislative reform SX1-2 in 2023, found gasoline prices spikes were less severe in 2024, following the oil refiner transparency accountability reforms enacted by the legislature.
The report also found refining margins at branded gasoline stations were much greater than at unbranded stations over the last decade – 75 cents per gallon vs 41 cents per gallon. This shows vertically integrated refiners, such as Chevron and Marathon, have used their market power to jack up rates at branded stations. Four refiners will soon control 98 percent of California’s refining market, the most consolidated market in the US.
“This is validation that Californians have been getting hosed at the pump for decades because too few refiners make too much of our gasoline,” said Jamie Court, president of Consumer Watchdog. “This is valuable data and sunshine is a key part of deterring higher prices. Nonetheless, the Newsom Administration took off the table valuable tools to combat this price gouging when it froze the price gouging penalty rules that it asked the legislature to create in 2023. Transparency only goes so far in preventing price spikes. This should be a wake up call to regulators and the next Governor that without the hammer of a penalty the four oil refiners that control 98% of our gasoline will continue to treat Californians like a private ATM. It’s no mystery that Californians have paid too much for higher refiner profit margins, the information is right there in the quarterly investor profit reports. What the state will do to deal with the surcharge is what’s important, and so far the only thing it can do is tell us it exists. That’s not good enough.”
In the wake of an explosion at Exxon’s Torrance refinery in 2015, oil refiners began to charge their branded stations 30 to 40 cents more for gasoline as a way of making extra profits. Consumer Watchdog first brought attention to the gap between branded and unbranded prices in testimony before (see time stamp 6:11) Governor Brown’s Petroleum Market Advisory Committee (PMAC) in 2015, which was headed by Severin Borenstein, who went on to name the phenomenon the “mystery gasoline surcharge.” Government is very slow to respond to such phenomenon.
“It took 10 years to validate a phenomenon Consumer Watchdog testified about in 2015,” said Court. “We have made progress on transparency, but we still need more accountability.”
