Sen. Feinstein: Investigate California gas price increases

Sen. Dianne Feinstein (D-Calif.) said Tuesday that the Federal Trade Commission should investigate her home state's rising gas prices, which she said were gouging drivers in California.

Feinstein, who is chairwoman of the Senate Appropriations energy and water subcommittee, said gas prices in California have increased at a faster pace than supply and demand would normally dictate.

"Californians filling up at the pump this month have been greeted by rapid price increases. Since August 6th, gasoline prices have risen 30 cents per gallon, reaching $4.21," Feinstein said in a letter to FTC Chairman Jon Leibowitz. "As a result, California has the highest gas prices in the continental United States. The increase is more than double the increase in the national average over the same period." 

The AAA Auto Club reported Tuesday that the average price of a gallon of regular gas in California was $4.13, compared to a national average of $3.76. A month ago, the average price in California was $3.80, compared to a $3.45 national average.

Feinstein attributed the spike in California prices to a fire at a Chevron oil refinery in Richmond, Calif. She said the fire "reduced refining capacity at the state’s third largest refinery."

But Feinstein said in her letter to Leibowitz the refinery fire was not an excuse for gouging drivers in California at gas stations.

"This dangerous incident has not resulted in a reduction of gasoline supply that would explain the recent rapid price increase," she wrote. "The California Energy Commission’s statistics show that just before the Chevron fire, the state's refineries were producing about 6 million barrels of gasoline per week. The previous month, they were churning out 7 million barrels per week."

Feinstein said the FTC should also investigate why California's gas prices are generally higher than most other states.

"Gasoline sales in California have fallen from 8.5 million gallons per day in 2006 to 4.9 million gallons per day this year, as drivers switch to more-fuel-efficient cars and elect to utilize public transit," she said. "Despite this drop in demand, and a clear excess in capacity, Californians have continued to endure unusually high gasoline prices when compared to their neighbors to which fuel refined in California is being exported."

Feinstein separately praised the Obama administration for announcing new gas mileage standards that will require cars to get 54.5 miles per gallon by 2025.

The change would mean "Americans will save $1.7 trillion at the pump and reduce oil consumption by 12 billion barrels, or 234 billion gallons of gasoline,” she said. 

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