California Gov. Gavin Newsom has asked the state attorney general to investigate major gasoline suppliers on suspicion of price-fixing or related practices.
Saying gasoline costs 30¢/gal more in California than in other states, Newsom said in a letter to Atty. Gen. Xavier Becerra, “There is no identifiable evidence to justify these premium prices.”
The move follows a recommendation by the California Energy Commission (CEC), which at Newsom’s request in April began a study of the price differential and won an extension until this month after making a preliminary report in May.
In a follow-up report dated Oct. 21, the CEC said its April-May analysis described factors in Californian gasoline prices, which in April had risen to as much as $1/gal more than the national average.
After accounting for “readily explainable factors,” it found “an unexplained residual price increase of the last 5 years.”
Since then, it said it has examined possible explanations and concluded that “the primary cause of the residual price increase is simply that California’s retail gasoline outlets are charging higher prices than those in other states.”
The more recent CEC report points to “higher-priced retail outlets such as 76, Chevron, and Shell,” at which prices last were the 30¢/gal cited by Newsome above the average price in other states.
“The CEC does not have any evidence that gasoline retailers fixed prices or engaged in false advertising,” the commission report said. “Moreover, the CEC lacks the expertise to determine whether such behavior occurred. The California Department of Justice is well-equipped to conduct an appropriate investigation.”
