According to Consumer Watchdog, the recent US$0.60 increase at Southern California gasoline pumps is the result of profiteering by Californian oil refiners and low inventories maintained by the companies to drive up prices in the state.
Investigating why low inventories were driving the giant price spikes, Consumer Watchdog tracked seven ships bringing refined gasoline from the West Coast to Mexico and South America and is presenting information about the ships movements to state investigators. The following ships were tracked over the last 2 - 3 weeks:
- Atlantic Queen (BP)
- Iver Extract (Chevron)
- Pudu (PMI)
- Teesta Spirit (PMI)
- Nord Gainer (CNR)
- Nord Imaginatic (Phillips 66)
- Stealth II (N/A)
On 30 June, Consumer Watchdog presented evidence to the California Attorney General suggesting that oil refiners were artificially manipulating gasoline prices. The Attorney General's office is currently investigating the refiners’ unusual pricing strategies.
"Oil refiners have kept the state running on empty and now they are sending fuel refined in California abroad right as the spectre of low inventories in the state drives huge prices spikes," said Consumer Watchdog President Jamie Court. "There is no good reason for the latest outrageous run up at the pump other than oil refineries manipulating inventories to drive gas prices artificially high. Californians should be outraged by this gouging and officials should consider forcing oil refiners to open their books and justify their refinery outages, exports and inventories."
According to Consumer Watchdog, chronic low inventories for the last year are to blame for the volatile price spikes. A California Energy Commission chart shows that for one year, gasoline inventories were below normal until ships started to bring fuel into the state in May and June. Consumer Watchdog reported to the Attorney General that as the market was flooded with fuel oil, refiners charged their branded gas stations US$0.30 more per gallon than they did the unbranded stations, keeping prices artificially high. As imports fell to zero in July, the spectre of low inventories sent prices spiking in Southern California and exports abroad exacerbated the problem.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/refining/14072015/refiner-profiteering-behind-gasoline-price-run-up-says-consumer-watchdog-1094/