Santa Monica, CA – Consumer Watchdog today said the recent sixty cents increase at Southern California gasoline pumps is the result of profiteering by California oil refiners and low inventories maintained by the companies to drive up prices in the state unreasonably.
Consumer Watchdog questioned why, if low inventories were driving the giant price spikes, that it tracked seven ships bringing refined gasoline from the West Coast to Mexico and South America. The nonprofit group is presenting information about the ships movements to state investigators.
On June 30th, Consumer Watchdog presented evidence to the California Attorney General that oil refiners were artificially manipulating gasoline prices. (Read the analysis here: http://consumerwatchdog.org/resources/wholesalegasolinemanipulaitonanalysis.pdf)
The Attorney General’s office has told the group it is investigating the unusual pricing strategies by oil refiners. Today Consumer Watchdog forwarded additional information about the recent exports to the Attorney General.
“Oil refiners have kept the state running on empty and now they are sending fuel refined in California abroad right as the specter of low inventories in the state drives huge prices spikes,” said Consumer Watchdog president Jamie Court. “There is no good reason for the latest outrageous run up at the pump other than oil refineries manipulating inventories to drive gas prices artificially high. Californians should be outraged by this gouging and officials should consider forcing oil refiners to open their books and justify their refinery outages, exports and inventories.”
The following link contains a list of ships Consumer Watchdog has tracked with refined supplies going from the West Coast to South America, Central America, and other foreign ports over the last 2-3 weeks:
http://www.consumerwatchdog.org/sites/default/files/resources/oilgrid.pdf
Consumer Watchdog said chronic low inventories for the last year are to blame for the volatile price spikes. A California Energy Commission chart, linked here (www.consumerwatchdog.org/sites/default/files/resources/recent_fuel_price_trends_market_overview_and_contributing_factors2_dragged.pdf), shows that for one-year gasoline inventories were below normal until ships started to bring fuel into the state in May and June. Consumer Watchdog reported to the Attorney General that as the market was flooded with fuel oil refiners charged their branded gas stations 30 cents more per gallon than they did the unbranded stations, keeping prices artificially high. As imports fell to zero in July, the specter of low inventories sent prices spiking in Southern California and exports abroad exacerbated the problem.
