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California gasoline price spikes

Hydrocarbon Engineering,

Consumer Watchdog has said that a price spike of 28 cents/gal. of gasoline at the pump over the last week was likely caused by a refinery outage or other refinery problem that the public is not privy to and has now called on the California Senate to act.

The price of regular gas in the state is now US$3.44/gal., 35% higher than the national average of US$2.55. It has been reported that industry insiders have said a refinery buying gasoline on the spot market is driving the latest price spike, likely due to an event not disclosed to the public. Oil company CEOs have refused to speak publicly about the recent price spikes, shunning state hearings, and Consumer Watchdog is calling on them to be subpoenaed.


Consumer Advocate Liza Tucker said, “something in the refinery system is wrong and no one knows why, but drivers are getting stuck with the bill. We are reiterating our call at March hearings for the state Senate to create a public reporting system for every planned and unplanned refinery outage, and the reason for it. So every Californian knows what is going on and the chances of market manipulation are reduced. This fresh spike exemplifies what happens when a handful of companies control a gasoline market. Refiners keep too little gasoline on hand and when a refinery experiences a problem, say flaring at Chevron, these companies use that as an excuse to jack pries higher, instead of competing to sell more gasoline for less than the refinery in trouble. That’s what happens in an oilgopoly.”


The State Senate held a hearing in March to address sharp price spikes that gouged an extra US$550 million out of consumers over the US average in the month of February, but the industry’s lobbying arm, the Western States Petroleum Association (WSPA), refused to send a representative. Philip Verleger, an economist invited by WSPA to appear, was careful to distance himself, insisting his opinions were strictly his own.

Edited from press release by Claira Lloyd

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