California Speaker of the Assembly to Announce Package of Bills Tomorrow on Refinery Practices and Gasoline Prices

FTCR also noted that although oil companies have blamed price spikes on refinery accidents and “unplanned outages,” the price increases began during a wave of planned maintenance outages, many of them lasting longer than expected, for reasons never publicly explained.

Last year, former Senator Joe Dunn's bill, SB 1794, would have given the California Public Utility Commission regulatory authority over oil refineries' marketing practices. It passed the California Senate but failed to advance through its first policy committee in the Assembly and died there. The California Progress Report featured an article by Dunn on the bill.

We also reported on the allegations of the Foundation for Taxpayer and Consumer Rights, suspected by others as well, that the market was being manipulated with gas prices being kept low in California in the months before the 2006 elections and the vote on Proposition 87, the alternative energy ballot measure fiercely opposed by the oil industry. Prices then surged after the election.

In an article in March, we urged action in Sacramento based on information from the San Francisco Chronicle and other sources that:

• The state has no real effective tools to deal with market manipulation. The California Energy Commission "keeps tabs," but has no regulatory power.

• The investigation opened last year by then Attorney General Lockyer into this is still open.

• Although critics of the state getting involved point out that prior investigations have failed to uncover a smoking gun, it is practically impossible to find out whether there is a real scarcity of refined gasoline in California, according to UC expert Severin Borenstein.

• Profits from refineries is one of the reasons oil companies, including Chevron, have posted record profits in recent years.

• There are a limited number of refineries in the state and Chevron itself controls about 25% of the oil refined in California.

Last week, FTCR was highly critical of the fact that Governor Schwarzenegger had just accepted a contribution of $100,000 from Chevron at a time when gasoline prices and refinery profits were at an all time high and they started a petition drive for a special session of the legislature.

With the amount of money that Chevron contributed to California candidates and electeds, and political institutions including the California Democratic Party, a fact which has drawn recent strong criticism, expect this fight to be hard fought and a difficult one for consumers to make significant advances in.

Bloomberg reports on other parts of the package that one of the bills will require California to "study whether the installation of temperature-measuring devices on gasoline pumps would correct the price for so called ``hot fuel'' and whether the state should help pay for the devices. Consumers could be paying for less gasoline than what the pump registers in warmer temperatures."

This is a point that FCTR has raised and also included in oilwatchdog.org as well.

According to Bloomberg, "Another bill would create a state database of gasoline supply and demand and their affect on prices."

Stay tuned.