Oil Companies Trot Out Tired, False Excuses for Gasoline Price Spikes, says Group;

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Comparison of Two States Shows Clean-Air Regulations Aren’t To Blame

SANTA MONICA, CA — California gasoline prices averaged more than $2.60 a gallon for regular last week, according to the federal Energy Information Administration, up 4.6 cents a gallon from the previous week. They’re likely to head even higher as the state switches from its winter clean-air blend to lower emitting summer gasoline formulas. So blame California clean air rules, as the “experts” are doing? Not so fast, says the nonprofit Foundation for Taxpayer and Consumer Rights.

“A comparison of the last week’s prices in California and Washington State shows that clean-air formulas have little or nothing to do with higher pump prices,” said Judy Dugan, research director of FTCR. “Washington State uses plain-vanilla gasoline, uses the same crude oil sources and same refining companies as California and has lower state taxes, yet drivers there are paying more right now for their gasoline. It’s brazen of the oil industry to blame California’s clean-air regulations for price spikes, when such comparisons show it’s a false excuse.”

EIA and industry data compiled by independent oil industry analyst Tim Hamilton shows that last week’s prices in Washington State averaged more than $2.64 a gallon, nearly 4 cents higher than in California. And the American Petroleum Institute, an industry trade group, calculates state taxes in California at 40.1 cents per gallon, while in Washington the same tax is 34 cents.

“In effect, before taxes, Washington State motorists are paying nearly a dime more than Californians,” said Hamilton. “Yet given the oil industry’s rationale, Washington ought to be paying a dime less.”

At the beginning of last spring’s record price spikes, the situation in California and Washington State was similar, though Califorinia’s prices later surpassed Washington’s.

A story today in the Los Angeles Times notes that in 2006, Californians paid the highest-ever average yearly gasoline price — $2.81 per gallon. That is higher even than inflation-adjusted prices during the oil crisis of 1981, the previous record period. See the story here:

Last week’s price jump bodes ill for 2007 prices, said FTCR. “Californians and the rest of the nation are at the mercy of a price roller-coaster for which the oil companies are running out of phony excuses,” said Dugan. “We hope that the new Congress will have the courage to take on oil company price-gouging of U.S. consumers rather than wink and look the other way, as the last Congress did.”

FTCR has called on state and federal lawmakers to:

* Update antitrust laws to adjust to the concentration of the oil and refining industry that has  occurred in the last decade, making manipulation of prices and supply simply a matter of common  interest rather than backroom collusion.

* Revise anti-gouging law to allow investigations of gasoline price spikes that are caused at the  refinery level. Currently there is no federal anti-gouging law, and state laws usually apply only to  retailers, and only in the event of natural disaster.

* Require refiners to boost capacity, keeping supplies on hand sufficient to prevent price spikes that pick motorists’ pockets and damage the state and U.S. Economies.

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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