Price Of Gas Up A Dime, State Investigators Still Mum On Consumer Watchdog Request To Rule Out Refinery Price Manipulation

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Feb 19, 2015, 06:47 ET

SANTA MONICA, Calif., Feb. 19, 2015 /PRNewswire-USNewswire/ -- Consumer Watchdog said today that the spot price of gas leapt a dime overnight, as the group had predicted in the wake of two refinery shutdowns affecting 16 percent of the state's refining capacity.

"We really need proper oversight of refineries in terms of ruling out price manipulation via shutdowns," said Consumer Advocate Liza Tucker, who wrote two letters to state officials earlier this week.

For the letters, see:
http://www.consumerwatchdog.org/resources/steelworkersstriketesoroltr.pdf
http://www.consumerwatchdog.org/resources/refineryletterfeb18.pdfOil

California has only got a ten-day supply of gasoline versus 24 days' worth on average everywhere else, she said. "In a situation like this, every day counts. We need legislation to require companies to keep more gas on hand to cushion refinery shutdowns."

Oil and gas companies are the biggest lobbyists in Sacramento. Between January 2009 and September 2014, the oil industry spent $106 million on lobbying and campaign contributions to politicians and ballot measures in California. In 2014, the Western States Petroleum Association (WSPA), which represents all major refiners in the state, including ExxonMobil, Valero, Phillips 66, Tesoro, BP and many others, spent $8.8 million on lobbying. Chevron, by itself, spent $4.2 million.

"It would be a shame if the state did not investigate to rule out price manipulation because of the power that the oil and gas industry wields," Tucker said.

On February 16, an industry analyst at the Bakken Oil Business Journal said that Exxon's Torrance refinery was experiencing a "mechanical issue" and could shut down for as long as two weeks. The refinery suffered an explosion two days later. Tesoro shut down its Martinez refinery at the beginning of February.

Tucker said that Consumer Watchdog questioned the need to fully shut down the Tesoro Martinez refinery, which was operating smoothly at half staff for its routine turnaround to start making California's special summer blend of gasoline.

The Exxon explosion was a compounding factor in driving up the price of gas, she said, and also needed to be investigated. "When accidents happen, the effect is strongly felt because we have so little gas supply on hand in California," she said. "Tesoro's closure tripped off a gas price hike and Exxon exacerbated it."

SOURCE Consumer Watchdog