Report: Gas price hike could be due to manipulation

The "Follow This Story" feature will notify you when any articles related to this story are posted.

When you follow a story, the next time a related article is published — it could be days, weeks or months — you'll receive an email informing you of the update.

If you no longer want to follow a story, click the "Unfollow" link on that story. There's also an "Unfollow" link in every email notification we send you.

This tool is available only to subscribers; please make sure you're logged in if you want to follow a story.

Please note: This feature is available only to subscribers; make sure you're logged in if you want to follow a story.

Subscribe

SACRAMENTO — California’s skyrocketing gas prices could be driven by “possible market manipulation” by a handful of well-known retailers, according to a new government analysis.

In a memo to Democratic Gov. Gavin Newsom, the California Energy Commission said at the end of April the difference between the state’s gas prices and the national average increased by more than a dollar — “the highest increase ever seen.” After accounting for the state’s additional taxes and other program costs, the increase has ranged between 17 cents and 34 cents per gallon since 2015.

The agency noted the price jump “roughly matches” the period in 2015 when an explosion at Exxon Mobil’s refinery in Torrance crippled production in the state for more than a year. But the refinery has restored normal operations, suggesting other factors are driving up the price of fuel.

One possible explanation the commission identified is some retailers are charging higher prices than others “for essentially the same product.” The commission noted Chevron, Shell, Exxon, Mobil and 76 have doubled their prices compared to ARCO, unbranded retailers and hypermart locations, which include stations associated with supermarkets or big-box retail stores.

“While this practice is not necessarily illegal, it may be an effort of a segment of the market to artificially inflate prices to the detriment of California consumers,” the commission noted in its report.

Agency officials said this type of price increase would normally drive customers to lower-priced competitors. From 2010 to 2017, the commission said the percentage of gasoline sold by Chevron, Shell and 76 retail stores dropped by about 3 percentage points combined.

However, the commission noted its preliminary estimates are “imprecise.” Agency officials have proposed studying the issue for the next five months and then presenting the governor with a full report.

Western States Petroleum Association President Catherine Reheis-Boyd said lots of factors can explain why California’s gas prices are higher than the national average, including the state’s mandated fuel blend requirements, increasingly high state taxes and regulations that include the Low Carbon Fuel Standard Program.

“This report provides further evidence of what market experts and government agencies have maintained for years: there are many factors that influence movement in the price of gasoline and diesel, but the primary driver is the dynamics of supply and demand of crude oil,” Reheis-Boyd said.

Show Comment

Our Network

Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Emerald Report
Spirited Magazine