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FTCR To Atty. Gen. Lockyer: New Data Shows Artificial Reduction In Gasoline Supply That Oil Execs Need To Answer For | Oil Watchdog

Press Release

FTCR To Atty. Gen. Lockyer: New Data Shows Artificial Reduction In Gasoline Supply That Oil Execs Need To Answer For

CONTACT:

Thu, May 11, 2006 at 1:08 pm

    FTCR To Atty. Gen. Lockyer: New Data Shows Artificial Reduction In Gasoline Supply That Oil Execs Need To Answer For

    NEWS RELEASE:
    May 11, 2006

    CONTACT: Jamie Court, 310 392-0522, ext. 327, or Judy Dugan, ext. 327

    Santa Monica, CA — In a letter to California Atty. Gen. Bill Lockyer, The Foundation for Taxpayer and Consumer rights praises his decision to subpoena oil company executives and points out new state data suggesting questions the executives should be forced to answer in detail.

    "We are writing with fresh evidence that California’s oil companies have artificially reduced the refined supply in order to drive up gasoline prices. A court would likely find this to be a violation of California’s Unfair Competition Act if the oil companies cannot adequately explain their behavior in response to subpoenas your office will issue and depositions your attorneys will take in the coming weeks," said the nonprofit, nonpartisan FTCR. Read the full letter.

    FTCR noted that the pump price of regular gasoline hit a new record average of over $3.37 today, nearly 50 cents a gallon above the falling national average, as recorded in the AAA Fuel Gauge Report. Yet crude oil prices are down and supplies ample. The California Energy Commission’s weekly refinery report shows that refinery production of gasoline is down from the previous week and 3.3% less than one year ago.

    Even more alarming, gasoline inventories at the refinery level were down 27.8% from a year ago, even as demand has fallen. "The increases in pump prices defy every market-based law of supply and demand," said the letter. "The fact is the few oil companies that control California’s supply are manipulating the price by artificially withholding supply through tactics that would be the envy of Enron."

    The Energy Commission stated in its report Wednesday that it is unable to determine a legitimate cause for the gasoline supply shortage at the refinery level.

    "Much like during California’s electricity crisis, a handful of energy companies are artificially shutting down production and even exporting supply to other states in a very tight market," said FTCR. "Our Foundation’s analysis of crude oil costs and ethanol costs also shows neither is responsible for the run-up at the gasoline pump." See the report.

    "Your office should be sure to demand full accounting of all refining production and inventories in this state by the companies," FTCR told Lockyer. "Testimony given by executives under penalty of perjury should provide a clear, detailed and statistical explanation of the refiners’ shocking drop in gasoline inventories. As you know, if you can prove that inventories were suppressed intentionally to drive up price, the oil companies may owe billions in restitution to the people of our state."

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