WEST LOS ANGELES (CBSLA) — Ever wondered why California’s gas prices were so high compared to the rest of the country?

Governor Gavin Newsom has, and now he’s asked the attorney general to investigate after he said a new report from the California Energy Commission suggested big oil companies were “misleading and overcharging customers by as much as $1 per gallon.”

Name brand retailers often say they charge more, because their gasoline was of higher quality, but the report concluded that brand-name gas stations were “charging higher prices for what appears to be the same product.”

Currently, the state’s average cost for gas is $4.14 per gallon while the national average is $2.65 per gallon.

“Simply stated, name-brand gas retail outlets in California are charging more for a gallon of gas compared to their unbranded, hypermart competitors,” Newsom wrote in a letter to Attorney General Xavier Becerra. “There is no identifiable evidence to justify these premium prices.”

The president of Consumer Watchdog said that this was the first time in modern history that a governor has requested an investigation — and possible prosecution — into the oil industry by the attorney general.

“The mystery surcharge adds up, especially for cost-conscious, working families,” Newsom said in his letter. “If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public.”

The California Energy Commission said it did not have any evidence that gasoline retailers fixed prices or engaged in false advertising, but it said retailers did not provide any proof that their gasoline was better than what the state required all retailers to sell.

The Western States Petroleum Association, an industry trade group, said it was reviewing the report, but they also said that it was important to know that California’s fuel taxes and standards — which are stricter than other states — accounted for the first $1.07 per gallon at the pump.

Comments (3)
  1. Phil Thacker says:

    Has anyone see a follow up to this October report?

    I read the report and found that the California Energy Commission (CEC) made alot of suggestions of why gas is higher, but clearly stated “The CEC lacks the expertise to determine whether such behavior occurred.”

    The reports confirmed base increase cost of gas refinery is essentially justified, but “retail” gaps have doubled. However, they neglected to identify that so has cost of sales (e.g. property taxes, retail taxes, business taxes, etc.) moreso than other states. THe CEC confirms that CA gas regulations will impact higher cost to for companies to abide by the states CARB regulations. However, the CEC then suggests it may be price fixing by the big oil companies or possibly false advertising luring an elastic market place to buy their higher priced fuel. However, they’re not experts to confirm this suggestion.

    So, my question is what research and findings have occurred since the CA governor sent the letter to Attorney General? Or is this simply another ploy for politicians to say “I called for an investigation as to why you are paying higher gas prices” during next elections.

    Anyone else want to hold politicians accountable? I would love to see a reporter dig into this and provide your findings.

  2. Scott Downey says:

    Simple enough, its your state tax policies and gasoline blend regulations, You can just blame your own selves. And you wont ever fix it as it is not broke, you got what you wanted.

  3. Alan says:

    Today in our city gas is $1.32-$1.39 a gal. why would you ever live in a state that gas is like $1.25-$1.75 a gal more? You are going to spend $400-$1000 more a year for gas. Add food an other essential items you are really losing out.

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