“California Penalty” Reaches $7 to $15 Per Fill-Up, Report Shows;

Published on

Oil Companies Sever Link Between Oil Prices and Pump Prices; Result is Bottom-Line Bonanza, Says Group

Santa Monica, CA — A report commissioned by the Foundation for Taxpayer and Consumer Rights shows a sharply higher (and still growing) gap between crude oil prices and gasoline prices — and between pump prices in California and the rest of the nation. The study, conducted by oil analyst Tim Hamilton, finds that Californians are paying $7 to $15 per fill-up more than the rest of the nation, with gasoline prices stuck at 40 cents to 55 cents a gallon above the U.S. average.

Because the costs of making gasoline are relatively stable, the disconnect between oil and gasoline prices amounts to a bottom-line bonanza for oil companies, the report concludes. (See the report and accompanying charts and data).

The report shows that the gap between crude oil and gasoline fell in the months leading up to last November’s election, and since then has risen precipitously.

“The 1st quarter profit reports of Exxon and Chevron, both of them major refiners in California, showed how much their new record profits were driven by the gasoline side of their business,” said Judy Dugan, research director of FTCR and its project. “This study by Mr. Hamilton gives us a picture of how much damage Big Oil’s profiteering at the refinery level is doing to Californians.” (See FTCR analysis of profits).

The Hamilton report’s most startling image, “A Mountain of Difference,” (Figure 3) shows as jagged peaks how much bigger the oil-to-gasoline gap has grown in California than the rest of the country.

“Unless oil companies take immediate action to increase the supplies of gasoline to the West Coast, a refinery fire or other disruption this summer could easily push California to $1 per gallon above the national average and over the $4 threshold,” said Hamilton.

FTCR said government action, starting with some outraged jawboning, is the only way to bring down prices and keep them from spiking again so unreasonably.

“The California gasoline penalty of up to $15 a tank is squeezing not just drivers, but the economy of the state,” said Dugan. “This is a clarion call for Gov. Schwarzenegger and the state’s top legislative leaders to come out of their ‘see no evil, hear no evil and say nothing’ trance.”

– 30 –

The Foundation for Taxpayer and Consumer Rights is a leading nonprofit and nonpartisan consumer watchdog group. For more information visit us on the web at: and

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Articles

In The News

Latest Report

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More articles