SACRAMENTO (CBS SF) — California is suing two multinational gasoline trading companies for allegedly manipulating the state’s gas prices and increasing costs at the gas pump.
Attorney General Xavier Becerra announced a lawsuit Monday against Vitol Inc. and SK Energy Americas. The suit alleges the companies took advantage of the market disruption following a 2015 explosion at a gasoline refinery in Los Angeles County to engage in a scheme to drive up gas prices for their own profit.
“Price gouging, whether it’s toilet paper or gasoline, stinks. It’s greed that hurts grandma, the Good Samaritan and everyday Americans,” said Becerra in a prepared statement. “Every once in a while we get to fight back. That’s what today’s lawsuit is about. No one is above the law.”
In the complaint, Becerra alleges that Vitol and SK violated California’s antitrust laws and engaged in fraudulent practices that raised the price of gasoline in the state. The companies did not immediately offer comment on the lawsuit.
A February 2015 explosion at a gasoline refinery in Torrance knocked out 10 percent of California’s gasoline supply and caused an undersupply of refined gasoline in the state. The lawsuit claims Vitol and SK took advantage of the disruption by colluding to drive up the price of reported benchmark trades during pricing windows for large sales in order to increase the price of gasoline in the state to their profit.
The complaint also alleges the firms executed certain trades to hide the scheme and share profits and that their actions illegally suppressed competition within the gasoline market and forced California consumers to pay more for gasoline.
“High gas prices, it seems, were not the result of gas taxes or California’s effort to protect the environment,” said Assemblyman Marc Levine (D-San Rafael). “High gas prices were the result of greed and possible market manipulation by the oil industry.”
UC Berkeley researchers believe that from February 2015 to October 2018, the alleged price gouging cost California residents more than $17 billion, equivalent to about $1,700 for a family of four.
Last October, Gov. Gavin Newsom asked the attorney general to investigate why the state’s gas prices were so high. While name-brand retailers often charge more because they say their gasoline is of higher quality, an analysis from the California Energy Commission could not explain the price difference, concluding “there is no apparent difference in the quality of gasoline at retail outlets in the state.”