California attorney general subpoenas refiners on gas prices

David Koenig, AP Business Writer

The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states.

In this Nov. 12, 2014 file photo, Lydia Holland replaces the gas nozzle after filling up at a gas station in Sacramento, Calif. The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states. (AP Photo/Rich Pedroncelli, File)

The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states.

Chevron Corp., Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp. confirmed on Thursday that they have received subpoenas in recent weeks.

The attorney general is making a sweeping request for information about gasoline supplies, pricing, and maintenance shutdowns that can temporarily create shortages and increase prices, according to people familiar with the investigation. The people spoke on condition of anonymity because they were not authorized to discuss details of the subpoenas.

The requests came from Attorney General Kamala Harris, a Democrat who is running for the U.S. Senate. Kristin Ford, a spokeswoman for Harris, declined to comment on whether her office was investigating.

The investigation was first reported by The Wall Street Journal.

Chevron spokesman Braden Reddall said the company received a subpoena from the attorney general's office and would cooperate with the investigation.

Valero received a subpoena "and we will respond accordingly," said spokeswoman Lillian Riojas.

Spokesmen for Exxon and Tesoro also confirmed the requests for information. None of the companies would discuss the matter further.

California perennially has among the nation's highest prices for gasoline. On Thursday, the average for a gallon of regular was $2.90 compared with the national average of $2.29, according to the auto club AAA.

Some consumer advocates have charged that refiners drive prices higher by tactics such as frequent or overly long plant shutdowns.

Refineries are routinely taken offline for maintenance, and there have been longer-lasting outages after disasters such as the explosion in February 2015 at an Exxon refinery in Torrance, California, near Los Angeles.

Gordon Schremp, senior fuels specialist with the California Energy Commission, said 2015 saw an "extraordinary price spike in magnitude and duration in California," which a commission advisory committee has been investigating.

"We are aware that they were doing this," Schremp said of the attorney general's investigation, "because off and on they've talked to us about what was going on with the 2015 market, important factors that can cause spikes in the markets."

Industry officials blame high prices on California's stricter clean-air requirements, which they say add costs and make it more difficult to import gasoline from other states when there is a price spike.

Rebecca Adler, a spokeswoman for the American Fuel & Petrochemical Manufacturers, called the allegations in the subpoenas baseless.

"We are confident that nothing will come of this," she said.

The group Consumer Watchdog has repeatedly called on Harris to investigate oil companies over California gas prices and welcomed news of the investigation.

"It's great that we have a law enforcement official asking questions about both supplying the market and equitable pricing within the market," said the group's president, Jamie Court.

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