Both California Senators Want Federal Gas Price Investigation

By: Brian Shields - Mon, 08 Oct 2012 22:40:40 -0800

SAN FRANCISCO (KRON) -- Both of California's Senators are calling for federal investigations into the recent spike in gasoline prices in the Golden State.

The latest surveys show the average price of a gallon of gas is $4.74 in San Francisco and $4.68 in both Oakland and San Jose.

Some in the oil industry say the increases are because of problems with California refineries that began more than two months ago with the Chevron Richmond refinery fire.  Both Senator Barbara Boxer and Senator Dianne Feinstein say those explanations don't add up.

"After the Chevron fire, the amount of production actually picked up," Feinstein says.  "So there shouldn't have been any price spike.  There is no reason in terms of market forces, supply and demand, to have a price spike.  The FTC has the responsibility to provide some monitoring.  I think they need to do some data analysis.  I think they really need to get on this, follow it closely and come up with some conclusions and hopefully set up a regular monitoring system so all of us know what is happening with these price spikes."

Senator Feinstein says it's up to the Federal Trade Commission to open an investigation while Senator Boxer is writing to Attorney General Eric Holder for help.

"I was particularly concerned to see a Reuters report that cited energy traders saying that a 97-cent price spike for prompt-delivery CARBOB gasoline this week had 'many of the hallmarks of a classic short squeeze.'" Senator Boxer said in a written statement.  "According to those industry sources, when West Coast refiner Tesoro Corporation was caught short of the supplies it needed, traders were able to quickly profit as prices skyrocketed. The Oil and Gas Price Fraud Working Group, working with its partner agencies, should immediately investigate whether any of these traders colluded to manipulate and drive up gas prices at the expense of Tesoro and California consumers.

Californians have too often been victimized as unscrupulous traders have created or taken advantage of supply disruptions to drive up energy prices. We cannot allow market manipulation by those who would seek to profit off the pain of our families at the pump."

KRON 4 crews spent much of Monday talking with drivers who are frustrated with the increase in gas prices.

"Never do we ever get a break with this," one driver tells KRON 4's Maureen Kelly.  "We can go from four dollars a gallon to five dollars a gallon in less than a week and that's supposed to be okay."

"I think about the refineries in the Bay Area being irresponsible and those costs being passed on to the consumer," another driver notes.  "It's frustrating.  I want to be a team player but it's difficult when we weren't the cause of the problem but we're paying for it."

Governor Jerry Brown is calling for a switch to the winter blend immediately as a possible way to lower gas prices.  

Stay tuned to KRON 4 and KRON4.com for the latest on the changing prices of gas in the Bay Area and across California.

(Copyright 2012, KRON 4, All rights reserved.)
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