Group Seeks A Legislative Fix As California Refinery Profits Surge

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A consumer advocacy group says Californians paid a $4.8-billion premium compared with prices in the rest of the nation during the first half of 2015 because of the state's gasoline price spike, and it proposed legislation to fix what it sees as problems in the market.

At a news conference Wednesday, Consumer Watchdog, backed by billionaire environmentalist Tom Steyer, criticized the fuel refining industry for overcharging Californians while the rest of the nation paid as much as $1.50 less. In July, Californians paid $1.2 billion extra, the group said.

"We know the California experience in gasoline prices is unprecedented," said Jamie Court, president of Santa Monica-based Consumer Watchdog. "There has never been this type of gouging."

Court pointed to oil refineries' high profits in the state at a time of falling oil prices as an indication of how refiners have taken advantage of consumers.

For the week of July 13, California refiners garnered gross profits, also known as refinery margin, of $1.61 a gallon, a record. The refinery margin, composed of refiner costs and profits, is calculated each week by the California Energy Commission.

The gasoline price surge has been worst in the Los Angeles area, in part because of regional refinery outages and low inventories.

Braden Reddall, a Chevron Corp. spokesman, said gasoline prices are cyclical, and although some refineries received substantial profits during part of this year, at other times, those margins have been razor thin.

"It is clearly misleading to focus on one part of the results from one part of the business from just one quarter," Reddall said.

California-specific regulations, high gasoline taxes and refinery troubles have all contributed to the expensive prices, Reddall said.

Tupper Hull, a spokesman for the Western States Petroleum Assn., said it is difficult to determine what exactly the oil refineries' profits are from the refinery margin figures alone. He called the efforts by Consumer Watchdog and Steyer a "campaign of disinformation."

Steyer called on state lawmakers to require:

•Oil companies to disclose profits on gasoline refined in California and to alert the public about planned maintenance and outages at their refineries;

•A minimum level of gasoline reserves to prevent price spikes;

•Higher legal and financial penalties for illegally conspiring to increase gas prices.

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