But the study focused on underlying market forces affecting prices, not whether there was manipulation by oil companies.
Associated Press
SACRAMENTO, CA — Unexpected refinery shutdowns, congested ports, higher out-of-state fuel shipments and higher costs for a key fuel component contributed to record spring gasoline prices that cost California consumers an extra $1.3 billion, state officials said Tuesday.
A report by the California Energy Commission found no evidence that market manipulation drove prices to all-time highs of more than $3 a gallon. But the study focused on underlying market forces affecting prices, not whether there was manipulation by oil companies.
“The commission, in its analysis, did not find a smoking gun,” said Joseph Desmond, the undersecretary of energy affairs for the California Resources Agency. “The data suggested that the market behaved as a market would when there is a series of unexpected events.”
He said a separate investigation by the attorney general’s office was looking into whether there was any criminal activity involved in the price increases.
The study, requested by Gov. Arnold Schwarzenegger, found there were four factors that contributed to sharp price increase for gasoline and diesel that hit California motorists in April and May. Increases in diesel prices cost consumers another $170 million:
California oil refineries had a sharp jump in unplanned shutdowns during the first six months of 2006 175 compared to 58 in the same period in 2005 that lasted longer than usual. A commission spokesman, Rob Schlichting, said they were due to “mechanical outages.”
Increased congestion at California ports delayed oil deliveries.
Exports of gasoline from California to Arizona and Nevada reached their highest levels in five years.
Prices for alkylate, a key component used in the production of gasoline, increased by about 75 cents a gallon.
The oil pipe leak at Prudhoe Bay in March didn’t appear to have a significant affect on prices, the report said.
Desmond said the commission was still gathering information from oil companies about their California revenue and expenses. The report recommends that lawmakers give the commission broader power to collect financial data from the industry.
Assembly Speaker Fabian Nunez, D-Los Angeles, said the report “proves that state regulators are hamstrung by their inability to get the information they need to see if Big Oil is gouging consumers.”
“We need the tools to make sure oil companies aren’t draining billions of dollars from the working people of California simply to pump up their profits.”
Nunez is pushing legislation that would allow the state to limit gas prices when there is an “abnormal market disruption.”
A consumer group and a spokesman for state Treasurer Phil Angelides, Schwarzenegger’s Democratic opponent in the November election, criticized the report. Jamie Court, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, called it a “whitewash.”
“Oil companies are ripping off Californians in exactly the same way electricity profiteers did by artificially shorting the market,” he said.
Angelides spokesman Nick Papas suggested the report’s conclusions were affected by what he said were $2.3 million in oil company campaign contributions to the governor.
“If the oil industry had written the investigation themselves, the conclusion probably would have been the same: there’s no need to repay consumers who have been gouged at the pump,” Papas said.
A spokeswoman for Schwarzenegger, Matt David, said the criticism of the report was politically motivated and that Angelides also had taken contributions from oil and gas companies.
“While the governor is concerned about the price Californians pay at the pump, Phil Angelides is more concerned about politics,” he said.
Officials with the Western States Petroleum Association, a trade group that represents 30 companies involved in oil exploration, refining and marketing, couldn’t be reached for comment on the report after it was released late Tuesday afternoon.
