By Kiet Do


BERKELEY (KPIX 5) — A University of California, Berkeley professor is drawing attention to a gasoline “mystery surcharge” in the state – unexplained price increases in gasoline which have cost drivers $20 billion since 2015.

Severin Borenstein, professor at UC Berkeley’s Haas School of Business and former chairman of the state’s Petroleum Market Advisory Committee, has spent several years crunching the numbers, trying to account for the state’s gas prices, some of the highest in the country.

“I’m very confident in the calculations, it’s really basic arithmetic,” said Borenstein.

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The surcharges began in 2015, when the refinery explosion in Torrance caused what was expected to be a temporary spike in gas prices, according to Borenstein. However, the surcharge remained ever since.

“Starting in 2015, they were about 40 cents above where you would expect them to be in 2015. And in 2016, ’17, and ’18, they were between 25 and 30 cents higher than what you would expect,” said Borenstein. “In total, that amounts to paying an extra $20 billion in gasoline since February 2015.

“It’s a payment that’s not going to the government, it’s going to the sellers. Where in the distribution chain it’s ending up, we don’t know. It could be it’s going to refiners. It could be that it’s going to the middle men who buy and sell gasoline along the way. The pipeline owners, the distributors, the retailers, all of them, or some of them could be getting some of that $20 billion. And it could be that it’s covering a legitimate cost, but we should find out what that extra cost is, because it wasn’t there for the previous 15 years.”

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In January, 19 state legislators sent a letter to Attorney General Xavier Becerra asking him to lead a formal investigation. Becerra has not publicly commented and the state Department of Justice typically does not announce investigations.

“So something is going on the California gasoline market. It could be that there are fewer manufacturers making California gasoline. It could be that it’s become more difficult to import gasoline because of some problem at the ports or with the pipelines or storage tanks. It seems like the state putting in some real resources to find out is well worth it.”

Borenstein estimates that since 2015, each California driver has spent about $500 on the mystery surcharges, which amounts to $11 million per day, and $4 billion per year.

“If that extra cost is due to some government regulation or policy, we need to look into whether that is something we can alter in a way that we don’t have to pay more for gasoline,” he said.

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Comments (21)
  1. Saw this on Drudge, but first on http://www.PressCalifornia.com, which has more real California news.

    1. It’s The Stupid Tax for voting straight Dem ticket.

      Elections have consequences. You vote for stupid people, expect dumb things to be done to you!

      1. Tena Kay Michel says:

        Have you ever even been to CA? Or are you just one of the many morons who believe whatever they see on Fox News? Not everyone in CA is a Democrat. If you’ll think back, both Governors Regan & Schwarzenegger were GOP. Most of NorCal is GOP. So I guess that makes YOU the stupid one, if you think everyone in our state is a liberal, or believe that we all vote the Dem party ticket. I bet you think watching CSI makes you a forensics expert, and watching Grey’s Anatomy makes you a doctor.

      2. Pete Morris says:

        Dear Tena, I have lived in Los Angeles for the last 32 years and have seen this city and the state slowly sink deeper into the cesspool. By the way, Arnold was a RINO and in no way was he a conservative. He was and still is a MORON! DimmoRATS have destroyed everything they get their hands on. Don’t even get me started on ‘sanctuary cities’! By the way, where do YOU live?

  2. Dan Purcell says:

    I’d rather just not spend my tourism dollars in California and funding their idiot programs…and donate to the MAGA 2020 reelection campaign

  3. D Ernie says:

    fee is the clever democrat idea of getting away from the word new taxes. This is popular in Dem Minnesota as in a new FEE of $10 on each axle on your car. And a new fee for your drivers license and of course special fee’s added for the processing of your licenc plate renewal, plates can be more than $800 a year on a vehicle here but its never enough.
    Yes and you will never ever get rid of it.
    Years ago we had a 1/2 percent tax to help pay for a new fire house and it was suppose to go away in two years but no the pols said this worked o well and we have so many other great things to spend it on, lets just make it permanent. Then that became not enough so they added another 1/2 on top of that and now we are fourth in the nation in sales taxes.

  4. Louis Emery says:

    I would counter with an investigation on government spending which makes this “lost” money ridiculously insignificant..

  5. Sean Wise says:

    Wow, Dr. Borenstein is worried about 25 to 30 cents extra per gallon while the the state’s gas prices were$1 more than the rest of the nation before the refinery disruptions. You likely have about $0.15 per gallon extra for California’s cap and trade payments, then there’s the $0.15 per gallon for the gas tax to repair the roads and finally you have the low carbon fuel standard which is currently maxed out because industry couldn’t invent a commercial scale cellulose to ethanol system. CARB knows the technology doesn’t exist but wants to keep the aspiration alive. This alone likely costs ~$0.20 per gallon. Why is there so much concern about what the commercial interests when it’s the state that really drives prices higher and sees pain at the pump as a feature not a bug.

  6. There is an EPA gas formulation for smoggy areas, and it satisfies all EPA rules for places like Los Angeles. But CA mandates a different formula that no one else uses, meaning that CA is a captive market. Going to the national EPA formula would save drivers 50 cents a gallon minimum.

    It’s almost as if the refiners in CA were in cahoots with the environmentalists, both wanting to keep gas prices high.

  7. Steve Hansen says:

    I’d feel sorry for Californians except they elected their political leaders so they’ll have to live with the consequences. And just wait for the mass migration of illegals. Gas prices will be the last of your worries when your law enforcement and social services cost explode.

    1. Carol King says:

      I didn’t vote for any of those idiots. Travis Allen had a better chance at beating Gruesome Newsom but the RINOs in this state picked Cox who didn’t have a snowball’s chance in hell.

  8. Daniel Silvan says:

    It’s called theft.

  9. yo mama says:

    It’s the idiot tax.

  10. sticknca says:

    This seems like the first legitimate claim of collusion in over 3 years.

  11. Darin Warren says:

    We’ve abandoned the Socialist State of CA years ago. That rat hole state run by idiot liberals voted in by idiot liberals will NEVER see another dime of my money.

  12. Don’t live there any more! NeNer NeNer NeNer!

  13. Phillip Sahagian says:

    They do this every year, just tell us different lies, every year

  14. Someone has to pay for all those illegals living there ! You want them…you have them !