California Refiners Subpoenaed as Group Questions Pump Priceby and
Consumer Watchdog submitted study to attorney general in 2015
Advocacy group questioned higher prices at branded stations
California’s attorney general has subpoenaed oil refiners operating in the state, where gasoline prices tend to be consistently higher than the national average.
The Wall Street Journal reported earlier on Thursday that subpoenas seeking information on gasoline pricing were issued last month to Chevron Corp., Exxon Mobil Corp., Tesoro Corp., Phillips 66, Royal Dutch Shell Plc and Valero Energy Corp.
Braden Reddall, a Chevron spokesman, confirmed in an e-mailed statement that the San Ramon, California-based company received a subpoena and is cooperating in the probe. Reddall didn’t provide details on what sort of information was sought.
Brendan Smith, a Tesoro spokesman, also confirmed the company received a request for information. Officials at Exxon, Shell and Valero didn’t immediately respond to requests for comment. A Phillips 66 spokesman declined to comment.
Western States Petroleum Association said "member companies will cooperate fully with any federal or state inquiry."
Gasoline prices in California tend to be higher than the national average because of tighter regulations and because the state requires its own blend of gasoline that few refiners outside of California produce. As a result, prices are prone to spiking after disruptions at even one plant, such as last year’s explosion at an Exxon refinery near Los Angeles.
Consumer Watchdog, an advocacy group, submitted an analysis of refiners and California gasoline prices last June. The group said companies used their leverage to charge more at branded stations than unbranded stations and questioned whether they were manipulating supply.
"The good news is there are going to be answers," Jamie Court, president at the group, said Thursday. "And the better news is that there are going to be consequences."
Kristin Ford, a spokeswoman for the attorney general, declined to comment on the reported probe.
Industry groups representing refiners said these companies are among the most heavily regulated, and previous investigations have found no wrongdoing.
"The idea that refineries in California are colluding is ridiculous," said Chet Thompson, president of American Fuel & Petrochemical Manufacturers. "California’s higher gasoline prices reflect the state’s onerous and burdensome regulations that do little for the environment, but adversely impact consumer costs."