Keeping supply low and driving up prices
California drivers pay more to fill their gas tank than drivers across the country, but Consumer Watchdog says that's because big oil companies manipulate the fuel supply.
The consumer group released a study this week saying drivers spent 2015 paying much more for gasoline than other driver because of a "mystery ship" owned by Exxon Mobile.
When the Exxon refinery exploded last February in Torrance, it reduced the capacity of supply in Southern California. The Consumer Watchdog study finds Exxon Mobil could have increased its supply by transporting fuel from out-of-state refineries, even refineries in foreign countries. But what about the damaged refinery in the Los Angeles area?
"What this report shows is that Exxon Mobil doesn't even need that refinery," said gas industry analyst Charles Langley. "They have refineries all over the world that can produce high quality California gasoline and import it."
However, the Consumer Watchdog study claims that instead of replenishing the fuel, Exxon "hid" one of its oil tankers near Singapore. There are two refineries there that can produce California blended gas.
Instead, the report claims Exxon moved the ship around for 70 days and made no attempt to bring fuel to California. When it did arrive, on one occasion the ship was empty, and on a second visit, it stopped in a Los Angeles port and then delivered its gas to Florida.
Langley says that is done to manipulate the market, to create panic and raise prices.
"If they can restrict supply the price goes up and they make more money than when there is an abundant supply of gasoline," said Langley.
Exxon Mobil spokesman Todd Spitler told the Associate Press and Los Angeles Times, "Exxon Mobil rejects these allegations and is committed to the highest standards of business conduct, has operated responsibly and in strict compliance with all laws."