Consumer Group Accuses Oil Refineries Of Manipulating Gas Prices Higher, Urges Investigation

BERKELEY (KPIX 5) — A consumer group is calling on the state attorney general to investigate what it calls a gouging of customers at the gas pump.

While gas prices often spike going into the summer driving season, the price of crude is low compared to this time last year.

The advocacy group Consumer Watchdog says it doesn’t add up, and that oil refineries are using market manipulation to artificially inflate gas prices this summer.

“The Golden State is getting gouged,” said Consumer Watchdog President Jamie Court. “The oil refineries are charging their branded gasoline stations 30 cents more than they are charging to unbranded gas stations.”

Court alleges such a practice violates federal anti-trust laws that require companies to charge similar prices for similar products. By charging their own gas stations more per gallon, Court says all stations end up charging more.

California Energy Commission Fuels Specialist Gordon Schremp said branded prices are normally higher than unbranded, though not this high and not for this long.

Schremp blames refinery outages for the higher prices. “I think the Exxon Mobil explosion back in the middle of February, that was a very significant outage for a refinery that was unplanned.”

But Consumer Watchdog points to energy commission data from the same month that shows refineries also exported 32,000 more barrels of gas overseas this February than last, gas that could have been used to keep prices lower in the California.

The group presented its data at commission meeting at the Energy Institute at Haas at the University of California, Berkeley Tuesday. It called on the attorney general’s office to appoint an independent prosecutor to look into the accusations.

Consumer Watchdog also criticized the location of the meeting, saying the Energy Institute at Haas has received more than a million dollars in donations from Chevron and the foundations of Exxon, BP and Shell Oil.

A spokesperson for the petroleum industry called the accusations of market manipulation “inflammatory and inaccurate,” pointing out that the industry has been the subject of dozens of investigations over the last few decades, none which found evidence of anti-competitive conduct.

More from Julie Watts
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