SACRAMENTO - A committee of the California State Energy Commission is looking for an explanation for why gasoline in the state costs more than most other states.

 

There is an acknowledgement that state clean gasoline requirements and a 15 cent per gallon tax for reducing pollution and global warming add to the cost, but that apparently doesn't account for all of the difference.

 

"The state has a problem, this has cost state consumers billions of dollars over the years," said Severin Borenstein, chair of the Petroleum Market Advisory Committee and a professor of economics at UC Berkeley.

 

Experts testified that California gas prices are highly reliant on the volatile spot market for oil and gasoline. Purchases by big players can effect the availability and price, which might not be tied to the price per barrel of oil, which has been falling.

 

Consumer groups say large oil companies are carefully gaming the system by controlling the import and export of oil and gasoline to create an artificial shortage to keep prices high.

 

Oil marketers attribute the cost of California gasoline to state clean air formulations placed on refiners. They say past investigations into price fixing have turned up nothing.

 

"Based upon that history, I don't think that there are these secret deals being had," said Jay McKeeman with the California Independent Oil Marketers Association.

But Borenstein says there are flaws in the system that invite abuse.

 

"I think there is certainly a very big risk that they are able to manipulate prices," Borenstein said.

 

The committee is looking into solutions like having the state or sellers hold onto oil and gas inventories to even out spikes in prices, temporarily waive state requirements on gasoline formulations, and to have oil companies be more transparent about how much product they are holding.

 

News Release provided by:

Lonnie Wong, FOX 40 news