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Californians Overcharged $4.5 Billion For Gasoline “Gouging Gap” Since Price Spike Began; Gas Prices Set To Climb Even More

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Santa Monica, CACalifornian drivers, who have paid an average of 74 cents more per gallon at the pump than drivers nationwide, have shelled out $4.5 billion more for their gasoline than US drivers from February to June, Consumer Watchdog said today.

The nonprofit group’s analysis is based on statewide consumption and the higher amount oil companies have charged Californians compared to the rest of the nation for gasoline from February to June, when refineries started going down and gasoline prices began spiking.

Consumer Watchdog reported the “gouging gap” has cost California consumers $214 million extra per week or $180 more per California driver thus far since February. Gasoline prices are expected to rise in coming days by 15 to 30 cents as oil refiners continue to keep California drivers on tight supplies and imports of gasoline grind to a stop.

Oil refiners reported banner first quarter profits from the higher California gas prices and the companies’ executives celebrated refinery outages and tight supplies in investor calls.

“California oil refiners have overcharged drivers billions using every trick in the book to keep gasoline prices high from unusually low inventories, historically high exports, suspicious refinery maintenance, and unprecedented pricing strategies at their branded stations,” said Jamie Court, president of Consumer Watchdog.  “Californians are paying unreasonably and artificially high prices and California’s oil refiners are getting rich off drivers’ pain at the pump.”

Last week Consumer Watchdog presented evidence to the California Attorney General that oil refiners were artificially manipulating gasoline prices by leveraging their branded gasoline station contracts. The Attorney General’s office has told the group it is now investigating the unusual pricing strategies by oil refiners.

Consumer Watchdog presented evidence last week that refiners have kept prices artificially high by overcharging their branded gas stations 30 to 40 cents more for gasoline than they were charging to independent or unbranded stations.

Consumer Watchdog pointed out the pricing technique may violate anti-trust laws, and a deal that Tesoro made with Attorney General Harris when the refiner purchased all of the Southern California ARCO stations from BP. In the deal, Tesoro agreed to maintain ARCO’s status as a low cost fuel provider.

Read Consumer Watchdog’s analysis to state regulators here: http://consumerwatchdog.org/resources/wholesalegasolinemanipulaitonanalysis.pdf

In the analysis to the Attorney General and the California Energy Commission’s Petroleum Market Advisory Committee Consumer Watchdog also documented how refinery outages, exports, and low inventories have kept Californians paying too much.

“It’s a lot like the electricity crisis, companies moving resources out of state, shutting down power plants, and making huge profit at the expense of Californians,” said Cody Rosenfield, energy researcher for Consumer Watchdog.

Consumer Watchdog’s report on 2015 refiner profits can be read: http://consumerwatchdog.org/resources/refiningprofits.pdf

Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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