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Californians overcharged for gasoline says Consumer Watchdog

Hydrocarbon Engineering,

Consumer Watchdog has said that Californian drivers, who have paid an average of 74 cents more per gallon at the pump than drivers nationwide, have paid out US$4.5 billion more for their gasoline than other US drivers between February and June of this year. The non-profit group’s analysis is based on statewide consumption and the higher amount oil companies have charged Californians compared to the rest of the nation for gasoline from February to June, when refineries started going down and gasoline prices began spiking.

Gouging gap

Consumer Watchdog has reported that the ‘gouging gap’ has cost California consumers US$214 million extra per week or US$180 more per California driver thus far since February. Gasoline prices are expected to rise in coming days by 15 – 30 cents as oil refiners continue to keep California drivers on tight supplies and imports of gasoline grind to a stop. Oil refiners reported banner first quarter profits from the higher California gas prices and the companies’ executives celebrated refinery outages and tight supplies in investor calls.

Jamie Court, President, Consumer Watchdog said, “California oil refiners have overcharged drivers billions using every trick in the book to keep gasoline prices high from unusually low inventories, historically high exports, suspicious refinery maintenance, and unprecedented pricing strategies at their branded stations. Californians are paying unreasonably and artificially high prices and California’s oil refiners are getting rich off drivers’ pain at the pump.”

Price manipulation?

Last week Consumer Watchdog presented what they believe to be evidence to the California Attorney General that oil refiners were artificially manipulating gasoline prices by leveraging their branded gasoline station contracts. The Attorney General’s office has told the group it is now investigating the unusual pricing strategies by oil refiners. The evidence suggested that refiners have kept prices artificially high by overcharging their branded gas stations 30 – 40 cents more for gasoline than they were charging to independent or unbranded stations.

Consumer Watchdog also pointed out that the pricing technique may violate anti trust laws, and a deal that Tesoro made with Attorney General Harris when the refiner purchased all of the Southern California ARCO stations from BP. In the deal, Tesoro agreed to maintain ARCO’s status as a low cost fuel provider.

Edited from press release by Claira Lloyd

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