Blame is the name of the game in trying to figure out why gas prices in California are higher than elsewhere. State officials have been wanting answers for more than a year now after gasoline prices rose$2 higher than the national average in summer 2022. But after the oil company CEO ghost state officials at a scheduled hearing on trade secret disclosure statements, Sacramento Bee reports California Attorney General Rob Bonta wants millions of dollars to potentially bring a lawsuit against oil companies over pricing. And it’s likely not going anywhere.
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The California Attorney General’s office, headed by Attorney General Rob Bonta, wants $8 million to fill 20 jobs to help the office investigate and possibly prosecute oil companies over gas prices in California.
But such a move could be trickier than it seems, and some experts don’t think any investigation will result in the companies breaking the law. One industry expert, Severin Borenstein, director of the UC Berkeley Energy Institute, said one of the reasons the investigation didn’t really go anywhere was because “antitrust laws are very narrow.”
“It is illegal for independent companies to set prices together or merge to become stronger in the market. It’s not illegal for a big player in the market to raise prices to make more money,” he said. Bee.
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While it is difficult to pursue these companies, it is not impossible. The state has done it before with little success. In 2017, a lawsuit was brought against one of the state’s largest refineries, Valero Energy Corporation, after it attempted to acquire a smaller petroleum distribution station. The Attorney General’s office argued that the acquisition would affect competition and lead to higher gasoline prices.
A few months later a federal court sided with the state by preventing acquisition for 10 years. Another lawsuit was brought against two oil companies in 2020 over claims by the companies allegedly manipulating the gas price index following the 2015 ExxonMobile refinery explosion. to the spike in gas prices and the case is expected to go to trial in September 2023.
However, the state’s high gasoline prices cannot be blamed on the major oil companies. Some errors can be blamed on the state and its officials. The state’s unique location as a “fuel island” – most fuel in the state is produced at refineries within the state – makes the state more vulnerable to price disruptions. Strict environmental regulations may also be responsible for the state’s increase in gas prices. These regulations force oil companies to refine their blends of cleaner-burning fuels. And then there’s the state tax. A 2021 report shows that $1.18 State gas prices are entirely inclusive of six different taxes and fees.
So while oil companies certainly play a role in how state gas prices are affected, state officials should also consider their role, even though gas prices High can also be an issue.
