Jon Baird

Big Oil Companies May be Manipulating Gas Prices, Report Says

May 17, 2019 - 1:22 pm
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Big oil companies may be manipulating gas prices after all, according to a report by the California Energy Commission.

The California Energy Commission says potential market manipulation could be driving up state gas prices.

In a memo to Governor Gavin Newsom, the commission says at the end of April the difference between the state's gas prices and the national average increased by more than a dollar - the highest ever seen.

Severin Borenstein, director of the Energy Institute at the UC Berkeley Haas School of Business,  said on KNX In-Depth Friday afternoon "the report did suggest there might be some issues with the competition but the main thing it did was we need a further investigation and it asks for five months to do a deeper dive."

Borenstein said "given what is it's costing Californians, even spending a few million dollars to figure out the problem, would be money well spent."

The commission believes some retailers are charging higher gas prices for essentially the same product.

Commission members noted that Chevron, Shell, ExxonMobil and others had double the price increase of companies like Arco or Costco.

But Patrick DeHaan, of Gas Buddy, believes we pay more in California because of higher taxes and fees and regulations and the intense competition helps stop manipulation.

"There's a tremendous amount of competition and that's a very powerful tool," he said.

Yet some consumers think it's all pretty fishy and that we’re paying too much.

Jamie Court, at Consumer Watchdog, believes we should only be paying about 30 cents more per gallon than people in other states. 

"But a buck, 10 more is highway robbery," he said.

He calls it the “Golden State Gouge."