California Gasoline Prices Spike 28 Cents In One Week, 89 Cents More Than USA

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Santa Monica, CA – Consumer Watchdog today said that a price spike of 28 cents per gallon at the pump over the last week was likely caused by a refinery outage or other refinery problems that the public is not privy to, and called on the California Senate to act.  

The price of regular gas in California is now $3.44 per gallon, 89 cents or 35% higher than the national average of $2.55 per gallon.  Industry insiders say a refinery buying gasoline on the spot market is driving the latest price spike, likely due to an event not disclosed to the public. Oil company CEOs have refused to speak publicly about the recent price spikes, shunning state hearings, and Consumer Watchdog has called for them to be subpoenaed.

“Something in the refinery system is wrong and no one knows why, but drivers are getting stuck with the bill,” said Consumer Advocate Liza Tucker. “We are reiterating our call at March hearings for the state Senate to create a public reporting system for every planned and unplanned refinery outage, and the reason for it, so every Californian knows what is going on and the chances of market manipulation are reduced.”

“This fresh price spike exemplifies what happens when a handful of companies control a gasoline market,” said Tucker. “Refiners keep too little gasoline on hand and when a refinery experiences a problem—say flaring at Chevron—these companies use that as an excuse to jack prices higher, instead of competing to sell more gasoline for less than the refinery in trouble. That’s what happens in an oligopoly.”

The State Senate held a hearing in March to address sharp price spikes that gouged an extra $550 million out of consumers over the U.S. average in the month of February, but the industry’s lobbying arm, the Western States Petroleum Association (WSPA), refused to send a representative. Philip Verleger, an economist invited by WSPA to appear, was careful to distance himself, insisting his opinions were strictly his own.

Business-leader, environmentalist and philanthropist Tom Steyer recently joined with Consumer Watchdog in a letter to the Senate demanding further hearings and answers from CEOs about how price spikes happen and urged subpoenas if the CEOs refused to appear.

Read that letter here:

“The public and the legislature is being kept in the dark about what’s really going on, and the ones with the answers are the CEOs of Chevron, Tesoro, Phillips 66, Valero, who control 78% of the state’s gasoline refining capacity,” Tucker said. “There is a reason that Californians are suffering more than consumers in the rest of the country. They have a right to expect the legislature to do something about it, and instituting a system of transparency would be a good start.”

The new spike comes as Consumer Watchdog continues its in-depth analysis of California’s 2015 price spikes. The analysis includes a historical look at California refiners, their market control, and how they manipulate the market to reap windfall profits through spikes that cause sticker shock at the pump.

Read the report here:

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Liza Tucker
Liza Tucker
Liza Tucker is a consumer advocate for Consumer Watchdog, following everything from oil and gas to the regulation of toxic substances in the state of California. She comes to us from Marketplace, the largest U.S. broadcast show on business and economics heard by ten million listeners each week on 400 radio stations. Liza worked at this public radio show for a decade, first as Commentary Editor and then as Senior Editor for both Washington and Sustainability News.

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