Gas Prices

By Kevin Smith, San Gabriel Valley Tribune
Posted: 10/13/15 – 10:53 AM PDT | Updated: 15 hrs ago

A consumer advocacy group testified Tuesday that California oil refiners are gouging motorists by hiking retail gasoline prices well above the wholesale price of gas traded within the oil industry.

In testimony before the California Energy Commission’s Petroleum Market Advisory Committee, Consumer Watchdog President Jamie Court said the gap between retail and wholesale prices has never been greater.

“All levels of the oil industry are raking it in while consumers are shelling it out to the tune of $6 billion more than U.S. drivers spent since February,” Court said in a statement. “The lack of competition in the market is the result of four refiners controlling 78 percent of the state’s supply and these companies using their market power to drive up prices and drive away competition.”

Consumer Watchdog noted that Chevron recorded $1.4 billion in U.S. refining profits during the first half of 2015, comprising the company’s most profitable first two quarters in its refining history.

That amount was three times their average first half-year profits since 1993, the organization said, and 54 percent of Chevron’s refining occurs in California.

Consumer Watchdog’s analysis of state and industry data shows that California’s oil traders are buying finished gasoline at $1.20 less per gallon than they’re selling it at the pump — an unprecedented margin. The average difference between wholesale and retail prices since 2000 has been 77 cents.

In September the gap was $1.21.

The Western States Petroleum Association (WSPA) declined an invitation to participate in Tuesday’s meeting with the Petroleum Markets Advisory Committee. In an Oct. 8. letter to committee Chairman Severin Borenstein, WSPA General Counsel Michael Barr said the issue is outside the purview of the petroleum industry trade association.,

“As you know, WSPA is a nonprofit trade association representing 25 companies, many of whom are market competitors in the petroleum industry,” Barr wrote. “As such, WSPA’s function is limited to public education and government advocacy regarding industry-wide issues. WSPA has no specific information about supply chain disruptions or pricing behavior unique to specific members or market participants.”

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