Will a Probe of California Oil Refineries Prove Market Manipulation?

Relying on a Nov. 15 McCullough Research report, six senators from the West Coast are calling on the Department of Justice (DOJ) to launch a "refinery-by-refinery probe," a press release by Senator Dianne Feinstein notes. Allegations suggest that the 66-cent per gallon of gasoline price increase yielded a $25-million a day profit for oil companies. "The difference between what drivers actually paid and what they should have paid exceeded $1 billion," the senators claim.

Oct. 5: California Gasoline Prices Jump by 20 Cents to 40 Cents per Gallon

The Associated Press reported that the average price for a gallon of regular gasoline reached $4.49. Southern California and the Bay Area were hit particularly hard, with some gas stations charging $4.54 or $4.60 for a gallon of gas. Fuel retailers note that refinery problems had contributed to the shortages.

Oct. 7: California Governor Considers Early Release of Winter-blend Fuel

The State of California requires the use of a specifically formulated summer blend to be sold at the pump until Oct. 31. CBS Los Angeles and the Associated Press reported that Gov. Jerry Brown discussed an early switch to the more readily available winter blend with operating refineries. By this time, gasoline prices had climbed to an average of $4.70 in Los Angeles. Statewide, the average price for a gallon of regular gasoline had increased to $4.65, which surpassed the previous high mark of $4.60 in June 2008. Responsibility for the sudden spike in gasoline prices was apportioned to a Southern California refinery suffering a Monday power outage.

Nov. 5: Gasoline Drops below $4 per Gallon

The Los Angeles Times noted that the statewide average cost for a gallon of regular gasoline reached $3.97. Nevertheless, the cost of gasoline was still more than 13 cents above the price charged in November 2011. California energy experts "blamed the spike on low gasoline supplies, low fuel production, a year of numerous refinery outages and exports of fuel to overseas customers."

Nov. 21: Gas Priced Fell by almost 90 Cents

Just before Thanksgiving, California gasoline prices averaged $3.77, the L.A. Times reported. This represented another 6.9-cent drop compared to the week before. The Los Angeles area saw gasoline prices of $3.82 cents per gallon, which was lower than the Central Coast region where the cost still reached $3.89.

Nov. 27: Six West Coast Senators Call for DOJ Probe into "Possible Market Manipulation and False Reporting by Oil Refineries"

The New Guard pinpoints the Exxon Mobile refinery in Torrance as the causation for the spike in gasoline prices that had affected California and indeed the West Coast. Sen. Dianne Feinstein, D-Calif., joined with Sens. Maria Cantwell, D-Wash., Ron Wyden, D-Ore., Patty Murray, D-Wash., Barbara Boxer, D-Calif., and Jeff Merkley, D-Ore., in calling for a DOJ investigation, Feinstein's press release notes.

"We are requesting a Department of Justice investigation of possible market manipulation and false reporting by oil refineries which may have created a perception of a supply shortage, when in fact refineries were still producing," the senators said.

Sylvia Cochran is a Los Angeles area resident with a firm finger on the pulse of California politics. Talk radio junkie, community volunteer and politically independent, she scrutinizes the good and the bad from both sides of the political aisle.

Source: http://news.yahoo.com/probe-california-oil-refineries-prove-market-manipulation-183800082--finance.html

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