Critics Accuse Oil Companies of Purposely Spiking Gas Prices

The Consumer Watchdog group and Tom Steyer, a billionaire environmental activist, are accusing oil companies of purposely spiking gas prices to pad their bottom line.

The oil industry critics point out refinery outages in February translated to big profits.

"It's very clear to anyone that looks that the oil companies are keeping us running on empty with too little refinery capacity and too little reserves to make a killing," said Jamie Court with Consumer Watchdog.

The accusation comes as Californians are seeing a steep hike in gas prices for the second time this year.

The nationwide average for a gallon of gas this week reached $2.66. In California, a gallon of gas is $3.71, up 31 cents since last week.

The Western States Petroleum Association, which represents the region's gas industry, denies the accusations and points blame toward the global price of crude oil.

"The amount we pay for gasoline, about two-thirds to three-quarters of that is just the cost to buy crude oil," said Tupper Hull with Western States Petroleum Association. "So when crude oil costs go up like they have, we're going to see impacts in the marketplace."

Industry representatives said California's prices are higher because the state's gas taxes are nearly 66 cents a gallon. In addition, California has stricter standards for its gas blend.

The prices also vary inside single city because retailers set their prices based on how much they paid for the gas.

Oil industry critics are calling on the state to subpoena executives for more transparency on how gas prices are set and to look into boosting oil reserves.

"It's time for Californians to get a fair shake in how they've been treated by the oil companies," said Steyer, who also serves as president for NextGen Climate.

But in two dozen federal and state investigations over the last 20 years, all of them have cleared the oil industry of collusion of anti-competitive practices, which leaves many consumers little hope that this call will achieve anything.

"It's frustrating, yes, because there's no results," San Francisco-resident Richard Que said. "It's just a bunch of people telling us that they're going to investigate and do something, but they're not."

The state senate has held a hearing this year and is in talks with the attorney general and energy commission to better understand the spike in gas prices before proposing new laws.

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