Senate Lawmakers to Hold Hearings on Possible Refinery Manipulation of Gas Prices Via Shutdowns and Slowdowns, Answering Call from Consumer Watchdog

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Santa Monica, CA — Consumer Watchdog said it looked forward to working with Senate lawmakers who today set hearings for March on possible refinery price manipulation, as the group had requested.

“Gas prices have gone up 70 cents so far since refineries started shutting down and it is high time we had refinery executives on the hot seat to answer questions,” said Consumer Advocate Liza Tucker. “We have a long list of questions. And if the Senate doesn’t get the answers they are asking for, we are hoping they will issue subpoenas.”

Consumer Watchdog has called twice this month for the California Attorney General and other officials to investigate possible price manipulation, but has not yet received an answer.

For the letters, see:’s-martinez

Tesoro announced it would shut down its Martinez refinery fully, rather than continue to partially operate, in the face of a steelworkers’ strike at the beginning of February. The explosion and fire at Exxon’s Torrance refinery that came on the heels of the Martinez shutdown helped prices spike more.

“Tesoro’s potentially unnecessary closure of its Martinez facility in the face of a steelworkers’ strike, and shoddy business practices at refineries like Exxon’s, have tripped off a sharp rise in gas prices,” said Consumer Advocate Liza Tucker.

The shutdown of Tesoro’s Martinez refinery, paired with damage to the Exxon Torrance facility, affects 16.5 percent of the state’s refining capacity. The state’s refineries make virtually all of the gas sold in the state because of California’s special blend requirements. The refineries also keep only a ten-day supply of gas on hand, while refineries in most other states keep an average supply of 24 days.

“On this isolated gas island, it is easy for refineries to pull the strings and restrict supply, or to create the perception of a shortage, in order to capitalize on windfall profits,” said Tucker.

Refineries must also be willing to invest properly in infrastructure to prevent accidents and shocks to gas prices, Tucker said. “It’s outrageous that refineries that make huge profits off of consumers do it at the expense of consumer safety, and that a culture of non-enforcement of tough environmental laws makes paltry fines that regulators levy just a cost of doing business.”

In its December report, Pump Jacking California’s Climate Protection, Consumer Watchdog warned that oil companies might artificially cut back on gasoline production and inflate gasoline prices to undermine new rules to control greenhouse gas emissions. The report can be viewed here:

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