Consumers Union Cautions State Regulators to Monitor Oil Markets for Possible Price Manipulation

SACRAMENTO, Calif., Dec. 16, 2014 /PRNewswire/ -- Consumers Union (CU) is cautioning state regulators to keep a close eye on oil markets in the new year. CU, the policy arm of Consumer Reports, delivered a letter to the California Energy Commission's Petroleum Advisory Committee asking them to be on the lookout for possible price manipulation starting in January 2015.

In January 2015, the state is scheduled to extend cap and trade to include transportation fuels. Oil companies must hold enough allowances to cover their emissions, and are free to buy and sell allowances on the open market. Despite knowing this timeline for years, oil interests have been vocal in their opposition to capping emissions on transportation fuels and have tried—and failed—numerous times to delay the start of the program.

"Oil companies launched a ballot initiative, backed a number of failed bills to dismantle clean energy efforts and have spent $70 million lobbying Sacramento politicians. Through it all, consumers have been steadfast in their support of clean energy and energy efficiency," said Shannon Baker-Branstetter, policy counsel for Consumers Union.

A survey recently conducted by Consumers Union found that Californians overwhelmingly support requiring oil companies to produce cleaner fuels (81 percent). The survey also found that consumers believe requiring cleaner fuels would result in more consumer choices (82 percent), and that oil companies should use their vast profits to pay for any costs to clean up consumer fuels (84 percent).

The dire predictions of gasoline price spikes on January 1, 2015 have been put forth by a number of groups, which a recent Bloomberg Businessweek article (Leaked: The Oil Lobby's Conspiracy to Kill off California's Climate Law, 11/24/14) revealed to be funded and orchestrated by the oil industry.  A recent paid advertisement from the oil-backed group, California Drivers Alliance exclaims, "On January 1, 2015, California drivers can expect a large 'hidden' gas tax." This ad appeared in the leaked November 2014 power point highlighted in the Bloomberg Businessweek article.

"Even as oil prices are sliding, oil industry-backed groups like the California Drivers Alliance and Fed Up at the Pump continue to claim that gas price spikes are coming starting in January 2015," said Baker-Branstetter, "We want to make sure that California consumers are protected against possible market manipulations."

The CEC's Petroleum Market Advisory Committee, which meets today in Sacramento, was established in September to better understand factors and conditions related to petroleum price fluctuations, the impacts on consumers, and policy options that may affect markets.

The average price of gasoline in California is now hovering at $2.85 a gallon, according to AAA.

Consumers Union (CU) is the policy and advocacy arm of Consumer Reports.  Consumers Union works for clean and affordable energy, telecommunications reform, health reform, food and product safety, and financial reform.  Founded in 1936, Consumer Reports has over 8 million subscribers to its magazine, website, and other publications.

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SOURCE Consumers Union