California’s spiking gas prices should be investigated for possible fixing, says Gov. Newsom

California Gov. Gavin Newsom speaks during a news conference at the California justice department on September 18, 2019, in Sacramento, Calif. (Justin Sullivan/Getty Images/TNS)

SACRAMENTO – Citing gasoline prices that are as much as 30 cents a gallon higher than those in other states, Gov. Gavin Newsom on Monday asked the state attorney general to investigate whether California’s leading oil and gas suppliers are involved in price-fixing or other unfair practices.

“Simply stated, name-brand gas retail outlets in California are charging more for a gallon of gas compared to their unbranded, hypermart competitors,” Newsom wrote in a letter to state Attorney General Xavier Becerra. “There is no identifiable evidence to justify these premium prices.”

Newsom’s request came on the heels of a report released by the California Energy Commission on the cost of retail gasoline in California. The 10-page document, prepared after the governor asked the agency in April to examine the issue, concluded the state’s drivers spent $1.5 billion more than those in other states for gasoline in 2018 _ even though there was no determinable difference in the gasoline being sold by different retailers.

“The name-brand stations, therefore, are charging higher prices for what appears to be the same product,” wrote commission officials. “The CEC received no response from the name-brand retailers in response to a request for information to support their product claims.”

In May, state officials concluded that “market manipulation” may explain the mystery surcharge imposed on California drivers. They promised additional details this month, though Monday’s report leaves a number of questions unanswered. Those unknowns included why so many residents choose higher-priced fuel instead of cheaper alternatives available in some locations.

“Consumers may be purchasing higher-priced gasoline brands for convenience, credit card acceptance or other reasons,” researchers wrote. “However, if competitors decide collectively to fix prices, this may be unlawful.”

Still, energy commission officials wrote they “found no evidence of unlawful activities” by major oil companies. Newsom’s request for Becerra to get involved is an attempt to look more closely at those operations.

“The mystery surcharge adds up, especially for cost-conscious, working families,” the governor wrote in his letter to Becerra. “If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public.”

California gas prices continue to outpace the rest of the country. The state’s average per-gallon price as of Monday was $4.14, according to AAA. The national average was almost $2.65 per gallon.

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