Why Are California Gas Prices So High? Gov. Newsom Launches Investigation To Find Out

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By Staff Reporters, KCBS TV-2/KCAL TV-9 Los Angeles, CA

October 22, 2019


WEST LOS ANGELES (CBSLA) — Ever wondered why California’s gas prices were so high compared to the rest of the country?

Governor Gavin Newsom has, and now he’s asked the attorney general to investigate after he said a new report from the California Energy Commission suggested big oil companies were “misleading and overcharging customers by as much as $1 per gallon.”

Name brand retailers often say they charge more, because their gasoline was of higher quality, but the report concluded that brand-name gas stations were “charging higher prices for what appears to be the same product.”

Currently, the state’s average cost for gas is $4.14 per gallon while the national average is $2.65 per gallon.

“Simply stated, name-brand gas retail outlets in California are charging more for a gallon of gas compared to their unbranded, hypermart competitors,” Newsom wrote in a letter to Attorney General Xavier Becerra. “There is no identifiable evidence to justify these premium prices.”

The president of Consumer Watchdog said that this was the first time in modern history that a governor has requested an investigation — and possible prosecution — into the oil industry by the attorney general.

“The mystery surcharge adds up, especially for cost-conscious, working families,” Newsom said in his letter. “If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public.”

The California Energy Commission said it did not have any evidence that gasoline retailers fixed prices or engaged in false advertising, but it said retailers did not provide any proof that their gasoline was better than what the state required all retailers to sell.

The Western States Petroleum Association, an industry trade group, said it was reviewing the report, but they also said that it was important to know that California’s fuel taxes and standards — which are stricter than other states — accounted for the first $1.07 per gallon at the pump.

Consumer Watchdog
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