SANTA MONICA, Calif.,
March 2, 2015 /PRNewswire-USNewswire/
-- Consumer Watchdog said today that prices per regular gallon of
gas in California were up an
unprecedented 96 cents in the last
month, nearly triple the 38-cent
increase per gallon nationwide.
"This is all pure profit for the oil companies," said Consumer
Advocate Liza Tucker. "The Senate has called hearings into this,
and it is high time that the CEOs of these companies be subpoenaed
to answer for this type of price gouging."
A regular gallon of California
gasoline now stands at an average of $3.39 a gallon, according to GasBuddy.com. The
average price for a gallon of gas in the rest of the country stands
at $2.42 a gallon, nearly a dollar
less.
"Since the start of February—when Tesoro announced the closure
of its Martinez refinery—and
today, the price of a regular gallon of gas in California has soared astronomically while the
price of crude continues to fall," said Tucker. "This isn't due to
regular supply and demand as oil analysts claim. It's because
refineries here are in a position to manipulate gas supply, and
thus gas prices, in a way that refineries in other states have a
harder time doing."
California refiners have a
chokehold on prices because they make the state's special blend of
gas themselves. They keep only a 10-day supply of gasoline on hand,
versus a 24-day supply that refineries in other states keep,
according to the California Energy Commission. Refineries that
perform annual maintenance also do not stagger periods when
refinery operations are running at less than full capacity.
In the face of a national steelworkers' strike, refineries have
used contract workers to fill in, and the increased sophistication
of automation at such facilities means fewer workers can run these
plants.
"We need a system to 'trust but verify' that shutdowns are
legitimate whenever a refinery cuts back sharply or closes a
facility for what might be bogus reasons," said Tucker.
"Refineries are in a position to make piles of money off of
restricting supply artificially."
Gas price spikes were compounded by the shutdown of Exxon's
Torrance facility in mid-February
due to an explosion and fire. The two refineries together represent
16.5 percent of the state's refinery capacity offline—a significant
chunk of capacity.
Tucker suggested the following questions for lawmakers to ask
CEOs at upcoming legislative hearings in Torrance and Sacramento:
- Why did Tesoro shut its Martinez refinery down completely—instead of
leaving it operating at half capacity—when its CEO told investors
that refineries can keep operating with lower staff levels
indefinitely?
- Why did managers at Exxon's Torrance facility keep running faulty
equipment instead of shutting down to avoid endangering workers and
the public with a subsequent explosion and fire?
- What will it take to make refineries invest the proper capital
into making their facilities safe in terms of not endangering the
public with both fugitive emissions from throughout refineries and
from accidents?
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SOURCE Consumer Watchdog