Price gouging at the refinery
Are you wondering why gas prices in California have topped $3 a gallon and in some cities are pushing $3.50, when the national average is around $2.50? The oil companies want us to think prices are going up because the cost of crude oil is rising and there are fewer refineries here, but there’s more to it than that.
As the San Francisco Chronicle pointed out in a March 9 front-page story, the discrepancy has much to do with profits. The article, headlined “Refinery Profit Margins Double in the West,” begins, “Profit margins at California’s gasoline refineries are soaring. And they’re taking pump prices along for the ride.”
Refinery profit margins have more than doubled since last fall, from an average of $17 a barrel over the past five years to $39 a barrel. This is one of the reasons oil companies have posted record profits in recent years.
The only time gas prices went down, in fact, was during the election cycle last fall, when Proposition 87, the alternative-energy measure, was on the ballot (it failed). Shortly after the election, they started rising again.
This has every appearance of being price gouging. It’s time for the Legislature to add refineries to the list of businesses that the Public Utilities Commission regulates. Otherwise they’re going to keep shafting us.