KGO-TV (ABC) – San Francisco
A long weekend is coming up, does that mean you’ll pay more at the pump? Many drivers will argue that gas prices go up during peak travel times. And today a report was released that agrees with them.
According to this report, California drivers paid $2.8 billion-dollars too much for gas last year.
The report gives a new reason why and some unusual solutions to bring down the cost.
Gas prices tend to skyrocket during peak travel times, like this up coming Labor Day weekend. That leads some to believe gas prices are being fixed.
But the Foundation for Taxpayer and Consumer Rights (FTCR) says prices aren’t being fixed — supplies are.
Jerry Flanagan, FTCR Advocate: “The gas companies have actually found a loophole in the existing law. … Instead of setting prices amongst themselves, they’ve utilized the strategy to decrease supply simultaneously, thus driving up market demand and cost of gas at the pump.”
A report released today by the Foundation offers a unique solution. Do away with premium gasoline.
“Ninety-seven percent of the cars on the market don’t require any gasoline above a 88 octane level. These other octane levels are simply a marketing ploy put out by gas companies because that’s where they make their deeper profits.”
The foundation says producing only a single octane of gasoline would increase supply driving down prices.
Economist Phillip Verleger is on the National Petrolium Council.
This afternoon he told 7 On Your Side, “It’s a simple case of supply and demand … not collusion. If we build more refineries or drive fewer SUVs … gas prices would be lower.”
According to the report, if California did move to a single octane, drivers would save 16-cents per gallon.