Rep. Levin Calls for FTC Probe of Possible ‘Market Manipulation’ by California Refineries

Rep. Mike Levin led 31 other members of Congress Friday in calling for a federal investigation into potential non-competitive practices, anti-consumer behavior, and market manipulation by California oil refineries.

At least half a dozen of the state’s 17 oil refineries have recently closed for maintenance, with some experts pointing to those shutdowns as the main factor causing California’s gas prices to spike by more than $2 per gallon.

Levin, who represents the 49th District in San Diego and Orange counties, authored a letter to the chair of the Federal Trade Commission that was co-signed by 31 other Democrats from California.

“While maintenance is a normal occurrence at refineries, this degree of divergence from national prices is unprecedented, regardless of planned or unplanned refinery maintenance,” Levin wrote.

“Even as gas prices continue to increase, the industry has provided no clear explanation on why prices are rising so rapidly as well as how refineries are making decisions about maintenance or outages,” according to the letter. “At moments of significant financial hardship for Californians, refiners should be transparent on market dynamics.”

The average price of a gallon of unleaded regular in San Diego was $6.395 on Friday, up $2.011 from one year ago, according to the AAA and Oil Price Information Service. By contrast, the national average was $3.891, just 64.7 cents greater than one year ago.

Levin and his colleagues urged the FTC in collaboration with the Department of Justice, Department of Energy and California authorities to “launch an investigation into any potential anti-consumer behavior and market manipulation within California’s transportation fuel markets.”

“Our constituents deserve to know whether these companies are manipulating markets at the expense of everyday Americans,” the lawmakers wrote.

Refiners have blamed the spike on California’s environmental requirements for specific blends fuel as well as the permanent closure of a large refinery in the San Francisco Bay Area.

State Republicans have lashed out at Democrats for failing to act on rising gas prices, most notably by failing to support a suspension of the state’s gas tax. Some also criticized Gov. Gavin Newsom’s call last week for a “windfall tax” on oil refiners.

“The problem in California is policy,” Republican Assembly Leader James Gallagher of Yuba City said. “We need major action on these prices, starting with suspending the gas tax and additional fees that make our gas so much more expensive here. All of these fees should be paused to account for rising inflation. Anything less is totally unacceptable.”

City News Service contributed to this article.