Tuesday 6 December 2016

Attorney general demands answers on sky high petrol prices

Published 01/07/2016 | 02:01

Petrol prices on display at a Valero filling station in Sacramento (AP)
Petrol prices on display at a Valero filling station in Sacramento (AP)

California 's attorney general has issued subpoenas to several oil companies to learn how they set petrol prices which are consistently among the highest in the US.

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Chevron, Exxon Mobil, Valero Energy and Tesoro said they had received the orders in recent weeks.

Attorney general Kamala Harris is making a sweeping request for information about petrol supplies, pricing, and maintenance shutdowns that can temporarily create shortages and increase prices, according to people familiar with the investigation.

Kristin Ford, a spokeswoman for Ms Harris, a Democrat who is running for the US Senate, declined to comment on whether her office was investigating.

The investigation was first reported by The Wall Street Journal.

Chevron spokesman Braden Reddall said the company received a subpoena from the attorney general's office and would co-operate with the investigation.

Valero received a subpoena "and we will respond accordingly", said spokeswoman Lillian Riojas.

Spokesmen for Exxon and Tesoro also confirmed the requests for information. None of the companies would discuss the matter further.

California is among several states which regularly charge the highest prices in America for petrol. On Thursday, the average for a gallon of regular was 2.90 dollars (£2.18) compared with the national average of 2.29 (£1.72), according to the car club AAA.

Some consumer advocates have charged that refiners drive prices higher by tactics such as frequent or overly long plant shutdowns.

Refineries are routinely taken offline for maintenance, and there have been longer-lasting outages after disasters such as the explosion in February 2015 at an Exxon refinery in Torrance, near Los Angeles.

Gordon Schremp, senior fuels specialist with the California Energy Commission, said 2015 saw an "extraordinary price spike in magnitude and duration in California", which a commission advisory committee has been investigating.

"We are aware that they were doing this," he said of the attorney general's investigation, "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."

Industry officials blame high prices on California's stricter clean-air requirements, which they say add costs and make it more difficult to import petrol from other states when there is a price spike.

Rebecca Adler, a spokeswoman for the American Fuel & Petrochemical Manufacturers, called the allegations in the subpoenas baseless.

"We are confident that nothing will come of this," she said.

The group Consumer Watchdog has repeatedly called on Ms Harris to investigate oil companies over California gas prices and 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 group's president Jamie Court.

AP

Press Association

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