Waxman seeks FTC probe of higher California gasoline prices

US Rep. Henry A. Waxman (D-Calif.), the House Energy and Commerce Committee’s ranking minority member, has asked the US Federal Trade Commission to investigate a gasoline price surge in the Golden State.

“Over the past week, retail gasoline prices in California have soared by more than 50¢/gal to a record price of $4.67/gal,” Waxman said in an Oct. 9 letter FTC Chairman Jon Leibowitz. “There has been no similar surge in gasoline prices nationwide.”

Waxman noted that the most common explanation is that a series of refinery accidents and temporary shutdowns have created a California supply crunch. US Energy Information Administration data show that West Coast gasoline inventories are “unusually low for this time of year—at the lower edge of the 5-year range,” he added.

“Periods of tight gasoline supply require special vigilance because of the opportunities for market manipulation—especially when individual market participants possess substantial market share as is the case in California,” Waxman said.

His request came just days after California Gov. Edmund G. Brown Jr. (D) directed the state’s Air Resources Board to immediately let refineries make an early transition to winter-blend gasoline, which typically isn't sold until after Oct. 31.

“[Gasoline] prices in California have risen to their highest levels ever, with unacceptable cost impacts on consumers and small businesses,” Brown said in announcing the move on Oct. 7.

He said shutdowns at refineries operated by ExxonMobil Corp. and Tesoro Refining Corp. tightened supplies. ExxonMobil’s plant came back online on Sept. 5 and Tesoro’s was due to resume operations within a week, Brown indicated.

ARB responded by issuing a regulatory advisory on Oct. 7 permitting the manufacturing, importing, distributing and sale of gasoline meeting a 9 psi Reid Vapor Pressure limit, the federal summertime RVP limit, through Oct. 31.

“All other requirements of the California reformulated gasoline regulations, including other fuel properties, specifications, record-keeping, and reporting requirements, shall remain in effect,” the notice continued. Those operating under the regulations should continue to distribute and sell gasoline which meets current California RVP limits where such supplies are available, it said.

Contact Nick Snow at nicks@pennwell.com.

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