July 2, 2015 — As an estimated 2.4 million Southern Californians hit the roads this Fourth of July holiday weekend, a Santa Monica consumers’ group is ramping up its war on alleged price rigging at the gas pump by oil companies.
Santa Monica-based Consumer Watchdog said it provided evidence Tuesday to the California Energy Commission (CEC) showing that the state’s oil refiners have for the past decade forced their branded gas stations to sell at prices as high as 30 cents more per gallon than the price charged to unbranded stations.
The result has been higher gas prices overall for California drivers, who collectively paid $2.4 billion more for their gasoline than the national average.
Drivers in Southern California could be paying the most for gas in the entire country, — $1.30 more per gallon than the national average, said Consumer Watchdog, which is asking the CEC to appoint an independent investigator.
“California oil refiners are using their market power over their branded stations to force gasoline prices to consumers at the pump to rise at all gas stations,” said Cody Rosenfield, co-author of the group’s analysis.
“Just as supplies began coming in from outside California to moderate supply problems driven by unprecedented refinery outages, oil refiners began using their price leverage over their branded stations to keep gas prices artificially high,” Rosenfield said.
Consumer Watchdog President Jamie Court said the practice “appears to violate the Robinson-Patman Act,” protecting businesses from unfair and arbitrary pricing.
The act “requires like and kind products to be offered at similar prices,” said Court.
The California Independent Petroleum Association, a trade association, has said that the barrel price of crude oil has the most impact on gasoline prices.
Nevertheless, last year, the CEC created the Petroleum Market Advisory Committee to monitor gas price fluctuations and their impacts on consumers. The committee was holding a hearing this week in San Francisco, according to the CEC’s website.
On Wednesday, oil stocks were trading at their lowest levels since May, according to published reports.
Oil prices dropped from a peak $107 per barrel in July 2014 to a low of $45 a barrel in January. Since then, the price has stabilized at just below $60 a barrel, according to oil-price.net.
According to gasbuddy.com, the average price per gallon for regular gas in California was around $3.41 cents on Wednesday. The cheapest gas in Santa Monica was $3.39 at the Arco at 332 Pico Boulevard, and the most expensive was $4.79 at a 76 Station at 1944 Pico.
Gas prices overall in Southern California are about 60 cents below where they were last Fouth of July, making a holiday road trip this year a bit more affordable, said the Automobile Club of Southern California.
AAA estimates 2.4 million people in Southern California will drive this weekend to their holiday destinations, a slight increase of .4 percent above July 4 of last year.
On Wednesday, California’s excise gas tax decreased by six cents per gallon, the State Board of Equalization announced.
“That is welcome new for overtaxed Californians who had essentially given government an interest-free cash advance,” said Board of Equalization Vice Chair George Runner. “The lower rate will help correct the over collection of tax brought about by lower gas prices.”
But there is no guarantee that the reduced tax will translate into cheaper gas for California drivers, who continue paying more than all other drivers in the nation, according to media reports.