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Thomas Elias writes in the Los Angeles Daily News that just one week before many California motorists began paying upwards of $4.30 per gallon for gasoline, oil tanker Teesta Spirit left Los Angeles headed for ports on the west coast of Mexico carrying more 300,000 barrels of gasoline refined in California. At a time when oil companies were raising prices by as much as $1 per gallon in some regions, oil companies like Chevron and Phillips 66 shipped about 100 million gallons of gasoline out of California. "Oil refiners have kept the state running on empty and now they are sending fuel refined in California abroad just as the specter of low inventories drives huge price increases," says Jamie Court, president of the Consumer Watchdog advocacy group.
According to Elias as the oil companies were shipping out that fuel, they reaped unprecedented profits reportedly approaching $1.50 for every gallon of gasoline they sold at the higher prices. "Gasoline prices are determined by market forces, and individuals who understand how commodity markets work have recently testified that those markets are working as they should," responded Catherine Reheis-Boyd, President of the Western States Petroleum Association, to charges of price gouging. "All of the many government investigations into gasoline markets in recent years have concluded that supply and demand are the primary reason gas prices go up and down." Kathleen Foote, who heads up the antitrust division at the California attorney general's office, agreed that the industry operates like an oligopoly in the state. But proving price fixing is difficult in a field where only a few players exist. "This system is made to break because oil refineries keep it running on empty," concludes Court. "They have every incentive to create a price spike like this."
(Score: 2, Insightful) by DutchUncle on Wednesday July 29 2015, @03:23PM
Uber has surge pricing. Is that market forces at work, or price gouging? This is a business, friends, and there's no reason that someone with a product to sell has to sell it at a cheaper price rather than a higher price (even if some of that higher price is eaten up by shipping costs). If you want decency, or fairness, or loyalty to country (or anything else), you want REGULATION. Yes, it has been abused, but there's a good reason it exists.
(Score: 2) by sjames on Thursday July 30 2015, @04:35PM
It is the result of unhealthy markets. Unhealthy markets happen either when there is inadequate regulation or the regulations are corrupted by a few large players in the market.
We have a LOT of unhealthy markets in the U.S.