Advocates demand transparency from refineries as gas prices spike

SAN FRANCISCO (KTVU) - Prices have once again spiked at Bay Area gas pumps.

KTVU spoke with customers at a San Francisco Chevron station where gas is now $4 a gallon.

"A few weeks ago, I was paying about $3.20, $3.30. I don't see how it went up 50 cents over three weeks," says customer Marvin Moran.

Once again, California consumers are seeing gasoline prices soar with no apparent, obvious reason.

Oil companies claim that refinery problems are causing a short supply. However, consumer advocates say, now and in the future, they're demanding that refiners open their books and prove it - which is something they don't do now.

On Tuesday consumer watchdog and billionaire financier Tom Steyer said it's time to do something because oil prices are down and California's consumption is 8 percent lower than a decade ago.

Chevron, Tesoro and Valero control 66 percent of California's market. "And yet, oil companies have increased the price of gasoline by 31 cents in the last week," says Jamie Court, President of Consumer Watchdog.

"When a small group of producers dominates a market the way a monopoly dominates a market, they're not regulated like a monopoly. They don't have to answer questions," says financier, philanthropist and environmentalist Tom Steyer.

For most folks, the price is the most important thing. But, another interesting question comes up - the spread.

Why are we paying so much more than the rest of the nation?

"Normally we're about 40 cents a gallon higher than the national average and right now we're at $1.07," says Severin Borenstein, a UC Berkeley energy economist and an expert in how gasoline and energy markets work.

"We don't know how much of this is a real scarcity in the market; that there's just not enough gas ability and not the ability to produce enough. And how much of it is the possibility that some of the refineries are not producing as much as they can in order to drive the price up," says Professor Borenstein.

Other states can trade gasoline when one has a shortage. But, California has its own unique blend of gasoline.

Chevron and Tesoro each have two California refineries and control more than half of the state's supply.

When one of their refineries or any California refinery for that matter goes down for maintenance or an accident, the other refineries make a fortune.

"It is time for transparency in pricing and it's time for Californians to get a fair shake," says Steyer.

Oil companies and their supporters say they're not cheating or gouging and that the market works. They point out gas prices in California were 54 cents higher a year ago today.


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