Oil refineries were under the microscope Thursday as the state Senate committee on Bay Area transportation held a hearing into this year's unprecedented chain of gasoline price spikes.

Out of the state's eight largest gasoline price spikes in the last 15 years, four happened this year including one hike that set a record high.

Three questions asked to witnesses were: Did numerous outages cause real shortages? Were the price spikes caused by a few refineries individually exercising market power? Did refineries individually withhold fuel from the market to spike prices?

"We actually do have companies that are in a pretty strong position to raise prices by putting less on the market," said Severin Borenstein, of the UC Berkeley Haas Energy Institute. "Important, there's nothing illegal. There's no law against them doing that."

So far there was no proof of illegal collusion.

"When there are disruptions,particularly multiple, unanticipated disruptions, the market reacts in a volatile way," said Tupper Hull of Western State Petroleum Association.

Energy researcher Robert McCullough said some spikes did not follow normal supply and demand.

"The prices spiked, the inventories increased simultaneously and we all said this certainly contradicts everything we learned in school," McCullough said.

McCullough said even though some refineries claimed they were down for maintenance, their pollution records suggest they were still producing and possibly selling those supplies to unknown speculators trying to corner the market.

"I think the evidence we've seen today is just a very first drop in that direction and I think we would need to see a lot more before I started accusing anyone of that," Borenstein said.

But everyone in attendance agreed that here simply is not enough information available to detect illegal activity.
"Some of that information that we need should be required by law," said San Francisco state Sen. Mark Leno. "And from my read of the state constitution, the Legislature has that authority."

Chevron and other refiners did not testify.