Exxon, Tesoro, Chevron subpoenaed in California gas price probe
By Liz Hampton
June 30 (Reuters) – California has issued subpoenas to Valero Energy Corp and Chevron Corp as part of a probe into whether oil refiners in the state have manipulated gasoline prices since 2014, the companies said on Thursday.
Shell, Tesoro Corp, Phillips 66, and Exxon Mobil and other major refiners are also under investigation, the Wall Street Journal first reported on Thursday, citing people familiar with the matter.
California Attorney General Kamala Harris sent subpoenas to the companies in May requesting information on trading, maintenance and repair activities to determine if refiners in the state withheld supply to lift gasoline prices, the Journal said.
“We can’t confirm or deny any subpoenas,” Kristin Ford, deputy communications director for Harris’ office, said by email. Harris, a Democrat, is running for the U.S. Senate in November.
California has the most expensive gas in the continental United States, in part due to special blending specifications mandated by the state. California regular gasoline retail prices were $2.929 a gallon in the week to June 27, according to the U.S. Energy Information Administration’s website, roughly 25.8 percent above the national average.
Complaints by consumer advocates have led to inquiries, but so far no wrongdoing has been found.
Chevron and Valero said in emails that they would cooperate with the investigation.
Exxon Mobil and Phillips 66 declined to comment, while Tesoro Corp and Shell did not immediately respond to a request for comment.
The Western States Petroleum Association said in a statement that members of the trade group would cooperate fully with any federal or state inquiry.
“I expect the conclusion will be consistent with past findings: market factors are the primary driver of fuel cost in California,” association President Catherine Reheis-Boyd said.
Consumer Watchdog, which has long pushed for an investigation into California gasoline prices, applauded the probe.
“California drivers have paid billions extra to pad the record profits of California oil refiners,” organization President Jamie Court said in a statement. “It’s past time for answers to the question of why refiners kept California running on empty so that they could charge us one dollar more per gallon at the pump.”
California’s relative geographic isolation from the rest of the country and lack of pipeline connectivity means it must rely on more expensive crudes brought to ports on tankers.
It has also been hit by local fuel supply cuts. In February 2015, a blast at Exxon Mobil’s 149,500 barrel per day Torrance refinery near Los Angeles damaged a gasoline-producing unit responsible for about 10 percent of the state’s gasoline supply, spurring greater market volatility.
That summer, the cost of wholesale gasoline in Los Angeles shot up to more than a $1.30-a-gallon premium to the NYMEX RBOB contract, according to Reuters data, an unprecedented level that sent local markets reeling.
The California Energy Commission in 2006 conducted a similar investigation into a spike in California gasoline prices at the request of former Governor Arnold Schwarzenegger. The report found no evidence of market manipulation.
(Reporting by David Gaffen in New York and Liz Hampton in Houston; Editing by Terry Wade and Richard Chang)