Who Is To Blame For California’s Pain At The Pump?

Published on

TV-10 News (San Diego, CA)

The following was broadcast on TV-10 News San Diego on Thursday, May 24, 2007. Watch the video here.

SAN DIEGO, CA — Many people around the country are feeling pain at the pump.

According to research, San Diego gas prices are now as high as those in Hawaii.

Many experts agree it’s going to get worse before it ever gets better.

So, who is to blame for the high prices around San Diego?

Gas prices are at an all-time high and many people are looking for someone to blame.

Jamie Court of the Foundation for Taxpayer & Consumer Rights said, “This is clearly oil companies manipulating the price of gas.”

Consumer watchdogs like Court will tell you it is the fault of big oil companies manipulating not only the market, but consumers, too.

Court’s foundation has spent the last seven months investigating why gas prices were at their lowest the day before the November elections.

However, the prices mysteriously jumped the day after the elections and have been rising steadily since.

Court said big oil is playing games, artificially reducing supply to create greater demand, which raises prices.

“This is about oil companies that have kept us running almost on empty. So, when there’s a sudden shock to the system the supply is short, the demand is high and the price goes up,” said Court.

Joe Sparano from the Western States Petroleum Association said the price increases are not the oil companies’ problem.

“I’ve heard this notion that we make less product and their margins are better. That’s hog wash,” said Sparano.

He said there are 14 refineries in California producing a special blend of gas to meet the state’s emission standards.

The problem is any reduction of the supply drives up the prices, according to Sparano.

According to fuel experts, at one point this year, nine refineries had maintenance problems at the same time.

Sparano said because of California’s standards, it is impossible to call a refinery in Texas or Louisiana to help out.

Building new refineries is the fault of consumers, according to oil companies. Sparano said nobody wants a new refinery in their backyard.

“Communities fight every proposal that we have made for adding capacity,” said Sparano.

Michael Shames of the Utilities Consumers’ Action Network said, “What we have to do is make sure they are playing fair.”

Shames said consumers should have the ability to make sure the oil industry is being honest.

Should consumers simply trust whatever oil companies say about lack of production? Or is the industry actually limiting supply to drive up costs?

“We’ve been calling for five years the creation of refinery cops to police the operations of refineries,” said Shames.

However, the oil industry has done a good job of preventing an outside source from regulating their refineries, according to consumer advocates.

Consumer advocates said the companies do it with power and money.

“We’re getting gouged at the pump, I know that,” said state Sen. Christine Kehoe.

Kehoe chairs the state’s Energy, Utilities and Communications Committee and said for years she has tried to introduce legislation to curb rising gas prices. Most have failed because of big oil’s influence, she said.

“In Sacramento, it is hardball politics and they are opposed to these bills and their goal is to kill them off,” said Kehoe.

According to OilWatchDog.org, the oil industry — including BP, Chevron, Conoco Phillips, Exxon Mobil and Shell — spent over $123 million lobbying last year. The group said $91 million was spent in California campaign contributions to defeat proposals like state Proposition 87.

The proposal was defeated and the oil industry profited, earning $119 billion last year alone.

“The message that went to the politicians was, ‘Don’t mess with us or we will spend that same amount of money to knock you out of office,'” said Shames.

It’s hard to explain why Californians pay as much as 55 cents per gallon more than the rest of the nation.

In the past 20 years, there have been two dozen investigations into the California oil industry.

So far, no one has found the smoking gun.

10News has learned state assembly member Fabian Nunez is the latest to outline legislation to help bring relief to motorists.

Consumer Watchdog
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