May 4, 2015 — Another one-week spike in gas prices has unleashed new charges by Consumer Watchdog that refineries secretly orchestrated the recent 28-cent increase.
Liza Tucker, a consumer advocate for the Santa Monica-based nonprofit, said last Thursday that the spike at the pump over the previous week was likely “due to an event not disclosed to the public” such as a refinery outage or other refinery problem.
“Something in the refinery system is wrong and no one knows why, but drivers are getting stuck with the bill,” said Tucker. “There is a reason that Californians are suffering more than consumers in the rest of the country.”
Drivers in the state this week were paying $3.44 a gallon on average– 35 percent higher than the nationwide average of $2.55 a gallon, according to Consumer Watchdog.
In Santa Monica last week, the cheapest gas was $3.49 a gallon at the 76 Station at 1776 Cloverfield; the highest, $4.74 a gallon, was also at a 76 Station, at 26th and Wilshire, according to gasbuddy.com.
The oil industry has cited high State gas taxes, which rose by 3.5 percent on July 1; higher petroleum standards that increase the price of gas and technical problems that have curtailed production this year.
When asked about Consumer Watchdog’s charges that refineries secretly orchestrated the increase, Tupper Hull, spokesman for the Western States Petroleum Association, said Consumer Watchdog advocates “don’t understand how the energy markets work.”
“The Consumer Watchdog group has a long history of making wildly inaccurate statements about gas prices and unfounded accusations about oil companies,” said Hull.
Hull however, did not explain the oil industry’s reasons for the recent increase.
Consumer Watchdog’s call for more transparency in the oil industry, especially at the refinery level, isn’t new. At a hearing of the state Senate Energy, Utility and Communications Committee in March, CEO Jamie Court asked lawmakers to force oil companies to disclose when refineries go off-line (Santa Monica Consumer Group Blames Refineries for Pump Spikes, April 1, 2015).
Refinery interruptions generate huge windfalls for oil companies, Court told the hearing.
“We are reiterating our call 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,” Tucker said last week.
A U.S. Energy Information Administration (EIA) report in 2013 found that planned and unplanned maintenance at refineries reduced refining capacity by 9 percent that year, causing a rise at the pump.