Thursday, April 15, 1999

Associated Press
Self-serve gas prices start at about $1.65 for regular and top
out at $2.10 for premium at this landmark Beverly Hills, Calif.,
Unocal station yesterday. Full service prices aren't posted on
the street, but if you have to ask you probably can't afford it.

California probes
gas gouging claims

An Oregon senator also asks
the Justice Department to examine
high prices in the West

Gasoline-Paying the Price

Associated Press


Soaring retail gasoline prices on the West Coast is attracting the scrutiny of government officials from California to Washington D.C.

Art California's Attorney General Bill Lockyer yesterday said his office is investigating possible price gouging by oil companies, which he says could lead to legal actions to cut high gasoline costs in the state.

"It appears less than half the recent price increases are related to either increases in the world price of oil or to the (San Francisco) Bay area refinery fires, which would only leave excess profit taking," Lockyer said yesterday in an interview with The Associated Press.

"Spikes of this sort . . . suggest that there are corporate behaviors that are anti-competitive," Lockyer said.

In Washington, Sen. Ron Wyden, D-Ore., asked the Justice Department yesterday to examine why gas prices in the West have risen more than 31 percent in less than a month.

Wyden wants the agency to work with the Energy Department to determine whether to investigate possible antitrust violations by the oil industry. The industry may be exploiting recent California refinery fires and tighter overseas supplies to boost prices, he said.

"When you see that kind of thing as a public official, you ought to ask the appropriate government agencies to determine if there is a pattern of price collusion that is causing the problem to worsen," he said in an interview.

A spokesman for major oil companies operating in the West said that similar allegations in the past were found to have no basis by federal energy researchers.

Prices in some West Coast markets recently have surpassed Hawaii's traditional highest-in-the-nation levels.

For much of the past two years, mainland gas prices were plummeting while Hawaii's prices barely budged. The discrepancy led the state of Hawaii in October to file an antitrust lawsuit against the major oil companies here, claiming they conspired to keep prices artificially high.

The state is seeking $1.8 billion in damages and penalties. Local oil company officials have denied the allegations and say Hawaii's prices are based on competition. The state's case is not expected to go to trial until 2001.

In California, the attorney general met Tuesday with angry California service station dealers, who say they are being squeezed by the latest price spike.

A spokesman for the dealers' association said they "shared sensitive oil company pricing information" with Lockyer.

A gallon of regular unleaded gasoline was going for $1.77 in downtown San Francisco and $1.51 in Los Angeles County yesterday.

Elsewhere in the West, prices ranged from $1.02 in Denver to $1.41 in Seattle and $1.59 in Las Vegas.

Lockyer said he expects it will take "a number of months to adequately understand the causes of the price spike and to determine whether there has been price gouging of consumers by oil companies."

Wyden made his request in the form of a letter dated yesterday to Assistant Attorney General Joel Klein, who heads the Justice Department's antitrust division. An agency spokeswoman did not return a telephone call requesting comment.

Prices across the country have jumped with the Organization of the Petroleum Exporting Countries announcing production cuts to boost sagging oil prices, but California has been hardest hit, according to analysts.

Fires at two refineries in Northern California cut into supplies, and the state's decision to remove an additive from gasoline helped boost the cost, they say.

Service station dealers discount industry explanations, saying that world crude oil price increases would not account for the retail spike and that reported supplies are higher than previous years.

Allegations of price gouging "has been looked into before," said Anita Mangels of the Western States Petroleum Association. "The result is that no such allegations have been substantiated."

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