Consumer Watchdog has said that prices per regular gallon of gasoline in California were up an unprecedented 96 cents in the last month, nearly triple the 38 cent/gal. increase nationwide. Consumer Advocate Liza Tucker has said, “this is all pure profit for the oil companies. 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 gas now stands on average at US$3.39 and the average price in the rest of the US is US$2.42/gal., nearly a dollar less. Tucker has commented, “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. 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 reportedly have a chokehold on price because they make the state’s special blend of gas themselves. They also only keep 10 days 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 the steelworker’s strike, refineries have used contract workers to fill in, and the increased sophistication of automation at such facilities means that fewer workers can run the plants. Tucker continued, “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. Refineries are in a position to make piles of money off restricting supply artificially.” Gas price spikes have been compounded by the shutdown of Exxon’s Torrance facility in the middle of this month due to an explosion and fire.
Tucker has suggested that the following questions be given to lawmakers to ask CEOs at upcoming legislative hearings in Torrance and Sacramento:
- Why did Tesoro shit 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?
Read the article online at: https://www.hydrocarbonengineering.com/refining/03032015/keep-a-close-eye/