LOS ANGELES (CBSLA.com) — Two Democratic U.S. Senators from Southern California were among a group of lawmakers who called on the Justice Department to investigate whether oil refineries faked a supply shortage during a sharp increase in gas prices earlier this year.
KNX 1070’s Claudia Peschiutta reports Sen. Barbara Boxer and Sen. Dianne Feinstein are among six Senate Democrats calling for an investigation.
In a letter (PDF) sent to Attorney General Eric Holder, the senators cited a “highly unusual set of concurrent events” surrounding the price increases and asked the Department of Justice’s Oil and Gas Price Fraud Working Group to conduct a “refinery-by-refinery level probe” to determine whether public reports of maintenance shutdowns were accurate.
Lawmakers contend that West Coast refineries were producing gasoline when they were reportedly shut down during May and October and that inventories remained stable during a stretch when pump prices jumped over 19 cents in one night.
After hitting a record average of nearly $4.68 a gallon, gas prices dropped by 8.5 cents over the last two weeks of October.
But despite a report that found nitrous oxide levels were the same at refineries claiming to be shut down for maintenance, oil industry analyst Phil Flynn downplayed the findings.
“When we talk about a refinery being up at full capacity or offline totally, that it’s a process,” Flynn said. “It’s not like you can flip a switch and turn off a refinery, it doesn’t work that way.”
The letter states that refineries could face up to $1 million per day in fines for any “false or misleading public announcements” made during the time period in question.