California orders oil refineries to justify high gasoline prices

Posted Jul 2, 2016 by Nathan Salant
California has demanded records from oil refiners to explain why gasoline prices in the state are among the highest in the country.
Kamala D. Harris  Attorney General of the State of California.
Kamala D. Harris, Attorney General of the State of California.
© California Department of Justice
Refiners Chevron Corp., Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp. confirmed Thursday that they had received subpoenas from California Attorney General Kamala Harris requesting information about fuel supplies, pricing and refinery maintenance, according to the Associated Press.
A spokesman for Harris, a Democratic candidate for U.S. Senate in November, declined to comment on what her office was investigating.
But consumer advocates have been calling on authorities for years to investigate California's gasoline prices, since the state drills for its own oil and processes crude in refineries up and down the state yet still pays more than other places that import all or most of their gas.
On Thursday, the average for a gallon of regular in California was $2.90 compared with a national average of $2.29, the American Automobile Association told the AP.
Critics also contend that California refineries are closed more often and for longer periods to drive up prices.
Chevron spokesman Braden Reddall acknowledged that his company had received a subpoena from the attorney general's office and was cooperating with the investigation.
Valero also acknowledged received a subpoena "will respond accordingly," spokeswoman Lillian Riojas told the AP.
Exxon and Tesoro confirmed being contacted by Harris' office but declined to discuss the matter.
Gordon Schremp of the California Energy Commission said his agency also was investigating price hikes in 2015 that he termed "extraordinary," and had been in contact with the attorney general's office.
"We are aware that they were doing this," he said, "because off and on they've talked to us about what was going on with the 2015 market, important factors that can cause spikes in the markets."
Rebecca Adler of the American Fuel & Petrochemical Manufacturers said the subpoenas were baseless.
"We are confident that nothing will come of this," she said.
But the California nonprofit group Consumer Watchdog welcomed news of the investigation.
"It's great that we have a law enforcement official asking questions about both supplying the market and equitable pricing within the market," said the organization's president, Jamie Court.