Gas Prices

Gasoline prices are falling, but a consumer advocacy group contends that energy companies are profiting unfairly. (Gene J. Puskar / Associated Press)

Ivan Penn
August 4, 2016

A consumer advocacy group accused oil refiners of intentionally keeping California’s gasoline prices higher than in the rest of the nation to bolster profits, despite growing inventories and falling wholesale prices.

Consumer Watchdog argued Thursday that per-gallon pump prices should be lower than the current $2.69 statewide average — $2.72 in the Los Angeles area — about 60 cents higher than the nationwide average, as measured by the AAA daily price survey.

Jamie Court, president of Consumer Watchdog, said the oil industry has attributed high retail gasoline prices to high state taxes, fees and California’s special blend of environmentally friendly fuel — factors that state regulators also point to as contributing to expensive gasoline. But Court believes the problem stems from oil industry price manipulation.

The state’s wholesale gasoline prices are “the cheapest in America but California gasoline is more expensive,” Court said. “We have a problem not with higher production costs or an isolated market but with refiners.”

In response to Court’s assertions, the Western States Petroleum Assn. defended its long-held position that California’s unique market is the cause of higher gasoline prices.

“Repeated investigations and independent analyses have consistently demonstrated that market factors are the primary driver of fuel costs in California,” said Catherine Reheis-Boyd, the trade group’s president.

State Atty. Gen. Kamala Harris has issued subpoenas to oil refiners as part of an investigation into unusually high gasoline prices in California during 2015.

In July 2015, average gasoline prices in the L.A. region reached as much as $1.50 a gallon more than the U.S. average. Regulators said much of the price gap was the result of the outage at Exxon Mobil’s Torrance refinery, which cut production to less than 20% of its capacity after an explosion in February 2015 destroyed a pollution control system.

It took Exxon Mobil more than a year to fully repair the plant. The oil giant sold the facility to New Jersey-based PBF Energy in July.

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