California Attorney General Investigating Oil Companies for Alleged Price Gouging

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California drivers were paying as much as $1.50 more per gallon than drivers in the rest of the nation.

Santa Monica, CA — California drivers were gouged to the tune of $10 billion at the pump last year, Santa Monica consumer advocacy group Consumer Watchdog said Thursday.

The group was reacting to a report from the Wall Street Journal about California Attorney General Kamala Harris' probe into the high prices Californians paid for gasoline last summer.

"The reports that we've offered and the letters we've shared with the Attorney General in trying to spark this investigation have shown one thing: oil refiners have not competed to bring gasoline into this market, they've cheated to short this market and drive up prices," Consumer Watchdog President Jamie Court said in a press conference.

The group provided evidence to the California Attorney General's office one year ago that refiners were using their market leverage to keep gasoline prices more than $1 above the U.S. average. The nonprofit group first wrote Harris calling for an investigation on Feb. 6, 2015, following suspicious refinery outages, then again on Feb. 18 on the day of the ExxonMobil Torrance refinery explosion.

Drivers in California paid, on average, $1.50 more for gasoline than the rest of the nation, and Court said it's not because of the additives to make cleaner-burning fuel. Only about four to five cents can be attributed to the cost of the additives, Court said.

"It's not a red herring, it's glaring big red herring," he said.

Consumer Watchdog has pointed to the failure of refiners to import product, excessive exports, inability to keep refineries running and refiners' ability to overcharge branded stations in Southern California as ways of artificially inflating prices.

Branded gas stations were charged as much as 50 cents more for the same gasoline as the one refineries were selling to non-branded stations such as Costco, Court said.

A spokesperson for the Attorney General could not confirm whether there was an active investigation, however, the Western States Petroleum Association said it will cooperate fully with the investigation.

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