Waxman wants federal probe of California gas price spike

Sen. Dianne Feinstein (D-Calif.) called for an FTC probe Sunday, while on Monday Sen. Barbara Boxer (D-Calif.) separately urged the multi-agency Oil and Gas Price Fraud Working Group, which is led by the Justice Department, to investigate.

AAA, in its weekly analysis Monday, noted that California already faced low supplies approaching the Oct. 31 end to the summer-blend gasoline requirements, a situation worsened by a power outage at an ExxonMobil refinery in the state.

While Exxon announced Friday that its Torrance, Calif., refinery had resumed normal operations, motorists were “already feeling the pain” of soaring prices, AAA noted.

AAA said that lower prices are likely on the way after the refinery’s resumption of normal operations and a waiver from Gov. Jerry Brown (D) over the weekend that allows early sales of winter-grade gasoline.

Waxman’s letter notes a series of problems and maintenance issues at California refineries – including the Aug. 6 fire at a Chevron refinery. Those incidents, combined with low inventories, are commonly cited as the reasons for high prices in the Golden State.

But he noted that those conditions may have made the California gasoline market ripe for manipulation or price gouging.

“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. When Los Angeles consumers see their gasoline prices skyrocket by 50 cents per gallon over the course of one week, something is wrong,” Waxman’s letter to FTC Chairman Jon Leibowitz states.

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