Study: California Refineries Operated During Periods Blamed for Gas Price Spikes

The October spike, which mostly affected California, was found to be about 66 cents higher per gallon of gasoline than should have been the case based on historical patterns of oil prices and gasoline inventories.

By Gordon Tokumatsu and Stephanie Miranda
|  Thursday, Nov 15, 2012  |  Updated 10:51 PM PDT
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Dramatic increases in fuel costs in May and October were widely blamed on refinery outages, but new research released Thursday reveals that refiners continued to produce gasoline in periods when the public was told the contrary. Gordon Tokumatsu reports from Van Nuys for the NBC4 News at 6 p.m. on Nov. 15, 2012.

Gordon Tokumatsu

Dramatic increases in fuel costs in May and October were widely blamed on refinery outages, but new research released Thursday reveals that refiners continued to produce gasoline in periods when the public was told the contrary. Gordon Tokumatsu reports from Van Nuys for the NBC4 News at 6 p.m. on Nov. 15, 2012.

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Dramatic increases in fuel costs in May and October were widely blamed on refinery outages, but new research released Thursday reveals that refiners continued to produce gasoline in periods when the public was told the contrary.

In May, California drivers paid at least 50 cents more per gallon than the rest of the country, according to the study by Oregon-based McCulough Research. In October, they paid about 66 cents more.

The jump in price prompted long lines at fueling stations, and forced some drivers to give up four wheels altogether.

“I actually stopped driving,” said Bridget Jasper.

Record-high gas prices prompted Gov. Jerry Brown to order emergency steps to increase the state's supply. In early October, Brown asked state regulators to allow refineries to start mixing and selling a particular type of gasoline that is usually only available in the state during the winter.

In May, fuel inventories swelled along with gas prices, according to the study.

Petroleum industry analysts and officials spoke publicly about the fire at a Chevron refinery in Richmond, Calif., as one of the causes for the spike. Delivery problems in pipelines and maintenance shutdowns were also fingered as reasons.

On Thursday, consumer watchdog groups began calling out those same officials about a new report that questions those explanations.

“This seems to be, to me, outright fraud,” said Jamie Court, with Santa Monica-based ConsumerWatchdog.org.

“The oil companies know that if they report publically that their refineries were down, the price of gasoline's gonna go up very quickly,” Court speculated.

Researchers collected environmental data from smokestacks at the plants. In the study, some of the plants were not only operating during those shutdowns but producing surplus fuel as well.

A petroleum industry spokesman told NBC4 News "the study’s data does not necessarily mean those facilities are able to produce fuel" for the gasoline market, though he couldn’t answer what kind of output was coming from the plants all the time, or how much.

“We dispute any suggestion that there was market manipulation of any kind,” he said.

Sen. Maria Cantwell, D-Wash., will ask the Justice Department and the Obama Administration to investigate the price-spiking, NBC Bay Area reported.

Sen. Dianne Feinstein, D-Calif., in October also called for a probe into the rising costs.

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