State Attorney General Investigating Potential Price Collusion By Oil Producers

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California’s top prosecutor is investigating whether major oil refiners defrauded consumers by colluding to boost gas prices above what the rest of the country paid last year after the shutdown of the ExxonMobil refinery.

The inquiry by Attorney General Kamala Harris comes in the wake of a report by the nonprofit group Consumer Watchdog that accused refiners of improperly hiding market data and blocking imports that would have stabilized soaring gas prices after the 15-month shutdown at ExxonMobil in Torrance.

The study, Against the Tide: How Missing Tankers Pumped Up Gas Prices and Refiner Profits, said that despite a resulting gas shortage after the February 2015 explosion at ExxonMobil, exports continued unabated and the oil giant imported only enough gas to cover three days of lost production.

Meanwhile, oil companies reported record profits in the state and drivers paid up to $1.50 per gallon more than their counterparts in the rest of the nation, the study found.

Tesoro Corp., which will soon have the largest West Coast refinery when it merges its Carson and Wilmington plants, confirmed receiving an information request from the California Attorney General’s office but would not provide specifics. Chevron Corp., ExxonMobil Corp. and others were sent subpoenas in late May seeking business and maintenance information, according to the Wall Street Journal.

“The petroleum industry is one of the most heavily regulated and closely monitored industries nationwide,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association. “Over the past several decades, numerous investigations and expert market analysis have found no evidence of illegal activities or violation of anti-trust laws.

“As they have done in the past, our member companies will cooperate fully with any federal or state inquiry. I expect the conclusion will be consistent with past findings: Market factors are the primary driver of fuel costs in California.”

The Attorney General’s office declined to comment about the matter, and Tesoro officials did not respond to a question about whether federal officials also are investigating the issue.

ExxonMobil spokesman Todd Spitler declined to comment on the investigation.

Consumer Watchdog President Jaime Court said state drivers paid $10 billion more for gasoline — roughly $400 per family — than their national counterparts last year. For most of the year, Californians paid $1 more per gallon. Roughly 20 cents of that is due to taxes for greenhouse gas emissions and other environmental impacts.

“Right now, there is a 50-cent gap between state and U.S. gas prices,” Court said. “Twenty-five cents more compared to the rest of the nation is the limit. A dollar or more is criminal. These are the specific issues we’ve raised, and we have a good reason to believe what’s being asked is very concrete questions about supply manipulation.

“I don’t think we’ve seen (regulators asking) questions like this before.”

With PBF Energy taking over Torrance’s ExxonMobil refinery today, Court said he hopes to see a return to more normal gas prices.

“The hope is that PBF is a competitor,” Court said. “We are still paying more versus the rest of the country.”

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