Boom for California top oil companies with soaring gasoline prices

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Agence France Presse

LOS ANGELES — As prices at the pump have soared, so have profits at California’s top five oil companies, according to a study released Monday by a Los Angeles consumer group.

The study by the Foundation for Taxpayer and Consumer Rights (FTCR) compared oil company profit reports and gasoline prices over the last two years.

The five companies included in the study — Shell, ConocoPhillips, ExxonMobil, Chevron Texaco and BP — refine 90 percent of California’s gasoline, controlling the majority of its gas stations, the group said.

The group found that in 2003, an average 35 percent increase in gas prices pumped up average company profits nearly tenfold — by 926 percent.

By comparing Securities and Exchange Commission filings on profits with Energy Information Administration gasoline price data, the FTCR found that on a quarterly basis, each spike in gas prices resulted in a spike in company profits.

Gasoline companies are expected to release their profitability reports for the first quarter of 2004 beginning at the end of the month.

“If pump prices stay up, then 2004 will (be) the most profitable year yet for the oil companies,” said FTCR petroleum industry consultant Tim Hamilton, who led the study.

“These levels of profits are likely to continue in the West, regardless of any actions taken by OPEC (Organization of Petroleum Exporting Countries) between now and the elections, since these spikes in profits are driven by refinery manipulation, not crude shortages,” he said.

Pump prices have been climbing across the nation, rising 31.5 cents per gallon since late December, but average gas prices in freeway-bound California hit 2.21 dollars per gallon (3.8 liters), compared with 1.82 dollars in the rest of the United States.

Consumer Watchdog
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