The Californian (Salinas, CA)
WASHINGTON – Shell Oil is reaping big profits from a Bakersfield refinery it plans to close Oct. 1, raising questions over whether the company is trying to keep gasoline prices high by reducing California’s already tight refining capacity, a consumer watchdog said.
Company documents obtained by the Foundation for Taxpayer and Consumer Rights show refining margins at Shell‘s Bakersfield refinery were three times higher than at its Gulf Coast refineries during late March.
A lack of refining capacity is partly to blame for California’s high gasoline prices. Regular gas prices averaged nearly $2.20 a gallon Tuesday in Riverside and San Bernardino counties, according to the AAA motorists group.
Regular gas prices averaged $2.11 a gallon Tuesday in the Salinas area, according to AAA.
“This is a national example of how refiners cheat rather than compete in the restriction of supply by artificial means,” said Jamie Court, president of the Santa Monica-based watchdog group. The group said it obtained the documents from company sources.
A Shell spokesman said the documents showing the refinery making substantial money in March are accurate, but only represent a snapshot in time and not a long-term financial picture.
“Two out of the last three years we did not make money in the Bakersfield refinery,” Shell spokesman Cameron Smyth said. “That refinery was built over 70 years ago atop its crude source. The crude in the ground is declining.”