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Santa Monica Group Backs Lawmakers’ Letter Calling Out Oil Companies

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Hector Gonzalez
Staff Writer

May 12, 2015 -- Two California senators who convened a hearing last month on gasoline pricing have asked oil company executives to explain what’s fueling recent spikes at the pump.

State Sen. Ben Hueso, D-San Diego, and Sen. Jim Beall, D-San Jose, sent letters last week to seven major oil company CEOs “requesting answers on California’s gasoline market and the price spikes that occur following incidents at oil refineries,” said Tanya Duggan, spokeswoman for Hueso, who chairs the Senate Energy, Utility, and Communications Committee.

“We respectfully request that you review the questions and prepare a response so that the committees may have a more complete understanding of the California gasoline market and all too common price spikes that occur in our state following incidents at oil refineries,” the letter reads.

Hueso and Beall said they want answers about how much refined gas producers keep in stock, as well as how refinery maintenance and outages impact prices, among other things.

Oil industry officials have said the recent increase in the price of crude oil is the biggest reason why local gas prices have jumped.

On Monday, the cheapest gasoline price in Santa Monica was $3.75 per gallon for regular at the World station at 1801 Lincoln Boulevard. The highest price was $1 more -- $4.75 at the 76 Station at 2601 Wilshire.

In March, Hueso and Beall, who heads the Senate Transportation and Housing Committee, convened a joint-committee hearing on gas pricing, but oil company executives did not attend.

“Since the March hearing, California has experienced another retail price spike related to incidents at California refineries,” said Duggan. “Such price spikes cost Californians dearly.”

Some consumer advocates including Santa Monica-based Consumer Watchdog said the hearing fell short of getting real answers from oil company executives about why Californians are paying more at the pump than drivers in other states.

Consumer Watchdog officials called on state lawmakers to make oil companies report refinery disruptions

“We are reiterating our call for the state Senate to create a public reporting system for every planned and unplanned refinery outage, and the reason for it, so every Californian knows what is going on and the chances of market manipulation are reduced,” said Lisa Tucker, a consumer advocate for the Santa Monica nonprofit (Santa Monica Group Sees Manipulation in Recent Price Jump, May 4, 2015).

 Hueso said his and Beall’s committees are “committed to better understanding the operation and dynamics of the California gasoline market so they can adequately assess proposals that might allow California to minimize or mitigate gasoline price spikes in the future.”

Jamie Court, president of Consumer Watchdog, said the letter from the senators was “a good sign.”

“The oil companies are boasting to their investors about profiting from their refineries going down and from tight supplies, then they are refusing to testify before senators,” said Court.

“It’s a thumb in the eyes of the Senate and now they are asking for answers. The oil refiners have a lot of explaining to do since they are reporting huge profits from the pain they imposed on us from February and March.”  

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