Gov. Newsom calls for investigation into California's high gas prices
Source: SF Chronicle
Gov. Gavin Newsom directed the California Energy Commission to look into possible irregularities in the state’s gas prices, which have recently soared above $4 per gallon. “Independent analysis suggests that an unaccounted-for price differential exists in California’s gas prices and that this price differential may stem in part from inappropriate industry practices,” Newsom wrote in a letter to the commission on Monday. “These are all important reasons for the Commission to help shed light on what’s going on in our gasoline market.”
Newsom asked the commission to provide a preliminary analysis by May 15. The commission announced it would start the probe immediately. Issues at California refineries have contributed to the high prices, according to gas price tracker GasBuddy, which recorded the average price at $4.03 in California and $4.10 in San Francisco on Tuesday. That’s more than $1 per gallon higher than the national average. A group of state lawmakers, including several from the Bay Area, sent a letter to Attorney General Xavier Becerra’s office in January asking for an investigation into gas prices. The request was spurred by the “final report” of the Petroleum Market Advisory Committee, which was formed by the Energy Commission in 2014.
According to the letter, the report found that after accounting for the state’s gas tax, fuel blend and greenhouse gas reduction costs, prices in California since February 2015 had a “continuous and significant unexplained differential compared to the rest of the country.” Before a fire at an Exxon Mobil refinery in Torrance (Los Angeles County) in 2015, gas price spikes following refinery problems tended to be of shorter duration, according to Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.
“From 1996 until the February 2015 Exxon Torrance refinery explosion in Southern California, our gasoline price premium tracked closely with our higher taxes and production costs,” Borenstein wrote in a blog post in 2017. “Occasional refinery outages spiked prices, but they returned to the expected differential within a month or two, because that’s how long it takes to import our special blend from refineries outside the state. The 2015 Torrance explosion, however, has been a different story.” Borenstein estimated the “mystery surcharge” has cost consumers $20 billion.
Read more: https://www.sfchronicle.com/business/article/Newsom-calls-for-investigation-into-13789550.php
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Last time I purchased gas, it was in the $3.40 range.
