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Investigate California's gas prices, says Prime Minister Gavin Newsom



Citing gasoline prices that may be 30 cents a gallon higher than in other states, Govin Newsom on Monday asked the state attorney to investigate whether California's leading oil and gas suppliers are involved in pricing or other unfair practices

Request, like Becerra's office said it would accept, comes amid growing frustration with high prices being charged in communities across the state. The survey has the potential to trigger the most consistent review of California gas prices this year and eliminate the inefficient efforts required by elected officials over the past two decades.

"There is no identifiable evidence to justify these premium prices," Newsom wrote in a letter to the State Atty. General Xavier Becerra.

Newsom's request came on the heels of a long-awaited report released by the California Energy Commission on the cost of gasoline in retail in California. The 1

0-page document, prepared after the governor asked the agency in April to investigate the matter, concluded the state's driver spent $ 1.5 billion more than in other states for gasoline 2018 – despite there being no definite difference in gasoline sold by various dealers .

"The name brand stations therefore charge higher prices for what appears to be the same product," commission officials wrote. "CEC received no response from well-known trademark dealers in response to a request for information to support its claims."

In May, state officials concluded that "unfair market" may explain the prices that California drivers. They promised further details this month, although Monday's report leaves a number of questions unanswered. These unknowns include why so many residents choose more expensive fuel instead of cheaper alternatives available in some places.

"Consumers can buy higher priced gasoline brands for convenience, credit card acceptance, or other reasons," the researchers wrote. "But if competitors collectively decide to set prices, this could be illegal."

Severin Borenstein, a professor at UC Berkeley's Haas School of Business who has studied what he calls the "mystery surcharge" on gas sold in California, applauded Newsom's decision. "It's really time to find out the cause," he said Monday. "Consumers have spent many billions of dollars over the years."

Borenstein's research found that even after reporting the state's high gasoline taxes and unique environmental regulations that set stricter refining requirements, Californians still paid about 40 cents per gallon more by the end of 2018 than drivers in other states – double what it had been during the most years since 2015.

State Energy Commission officials said in their report that refinery challenges, refinement of standards and temporary closures or incidents in individual locations do not explain the cost difference. And the report found the most noticeable rise had been in prices paid at gas station stations since 2012 run by companies that include Chevron and Shell. [19659002] "These price increases occurred without significant changes in the overall market share of these brands at the retail level," said the report.

Researchers found that Chevron's retail gasoline sales in California resulted in nearly $ 1.6 billion in revenue in 2018, more than double as much as the sales generated earned in 2010. Shell's total retail sales reached $ 818 million in 2018, up from $ 421 million in 2010.

A Chevron spokesman referred questions to an oil industry group. A request for comment from Shell did not immediately resume [19659002] While energy commission officials wrote they "found no evidence of illegal activity" by major oil companies, they also acknowledged that they lacked the skills to conduct a more thorough investigation – a deficiency apparently resolved by Newsom's request for Becerra to get involved.

“The mystery charge is posted, especially for cost conscious, working families, "the governor wrote in his letter to Becerra. "If oil companies conduct false advertising or price fixing, legal action should be taken to protect the public."

California's gas prices continue to exceed the rest of the country. The state average price per gallon per Monday was $ 4.14, according to AAA. The national average was nearly $ 2.65 per gallon.

Borenstein, who previously served as chairman of the Energy Commission's Advisory Committee on the Petroleum Market, said that the governor's call for an in-depth investigation could easily curb the pressure on a topic that also has often faded in the background, even when it costs California large sums of money.

"It will take people and investigative resources," he says of the impending probe through the Chancellor of Justice and the California Dept. of Justice. "Even if they do not find any illegal documents, if they find the cause, investigators can advise on solutions."

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