California Sues Energy Companies For Gas Price Gouging After Voters Nearly Revolted Over Fuel Taxes

From The Daily Caller

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Chris White Tech Reporter May 05, 2020 6:13 PM ET

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  • California Attorney General Xavier Becerra sued two energy trading companies Monday for allegedly colluding to increase the state’s gas prices. 
  • Becerra’s move comes after Gov. Gavin Newsom suggested in 2019 that oil companies are responsible for high fuel prices. It also comes more than two years after voters nearly revolted over the state’s gas taxes.
  • Local activist Carl DeMaio told the Daily Caller News Foundation that Becerra and Newsom are “arsonists” who start fires and then have the “audacity to say someone else is at fault.”  

California sued two major energy companies Monday for allegedly manipulating gas prices artificially.

Energy companies Vitol Inc. and SK Energy Americas drove up gas prices through “manipulative trades,” California Attorney General Xavier Becerra said in a complaint filed Monday.

“It’s greed that hurts grandma, the Good Samaritan and everyday Americans,” Becerra said in a prepared statement. “Every once in a while we get to fight back. That’s what today’s lawsuit is about. No one is above the law.” (RELATED: Here’s Why Californians Pay Way More For Gasoline Than Everyone Else)

Vitol and SK Energy Americas took advantage of a market disruption after a 2015 explosion at a gasoline refinery in Los Angeles County knocked out roughly 10% of California’s gasoline supply, according to Becerra’s lawsuit.

Becerra claimed the two gasoline trading companies colluded to keep prices high, thereby violating the state’s antitrust laws. Becerra and Newsom have not responded to the DCNF’s requests for comment, nor have Vitol and SK Energy.

“High gas prices, it seems, are not the result of gas taxes or California’s efforts to protect the environment,” said Democratic state Assemblyman Marc Levine, who announced the lawsuit alongside Becerra Monday.

California Gov. Gavin Newsom asked the attorney general in 2019 to investigate oil companies for conspiring to keep gas prices artificially high.

Newsom asked for the investigation at a time when the price of a gallon of gas in California was increasing, with the average cost skyrocketing to $4.18 while drivers in other areas are paying as much as $5 per gallon, CNN Business reported in October 2019, the highest prices in the country.

Newsom’s predecessor, former Gov. Jerry Brown, signed a law in 2017 that imposed a 12-cent tax increase per gallon and raised the tax on diesel fuel by 20 cents per gallon.

California became the state with the highest gas taxes in the country in July 2019 after a variable state tax increased another 5.6 cents. California drivers are taxed 80 cents per gallon today, an ABC News affiliate in California reported in July 2019.

The coronavirus pandemic reduced the overall cost of gasoline, with the average price at $274 per gallon California as of May 5, according to figures from the American Automotive Association’s gas price website.

Some critics of California’s gas tax said Becerra is partially to blame for the high prices.

“They’re arsonists. They create a controversy and then have the audacity to say someone else is at fault,” Carl DeMaio, a San Diego activist who spearheaded the campaign to nix the gas tax, told the Daily Caller News Foundation. Becerra and his office are simply trying to shift blame here, said DeMaio.

Supporters of a failed campaign to nix California’s unpopular gas tax law during the 2018 midterm election promised to recall Becerra for supposedly misleading voters who oppose the law. They argued that his office labeled an initiative intended to repeal the law in a way that made it appear to voters that a “yes” vote would eliminate road repairs and transportation funding.

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64 thoughts on “California Sues Energy Companies For Gas Price Gouging After Voters Nearly Revolted Over Fuel Taxes

  1. Would the last arsonist to leave California please remember to turn out the lights?

  2. Any company even tangentially connected to the petroleum industry had best quit CA before they lose their shirts in legal B.S.

    • It just gets passed along and that is fundamentally why prices are high there. If a profit cannot be made in that environment, then that is when businesses need to leave.

    • If it was $274 per gallon, they still wouldn’t be able to fix the potholes on city streets.

      • $1.15/gal in SE Denver this morning.

        I’d be happy to drive some gasoline out to CA.

        • In the UK we buy our fuel in litres. I filled up last week at £1.03 per litre which is about £3.90 per US gallon or in dollars $4.83 per US gallon.

          Before the lockdown it was around $6 per US gallon.

          • Well … that’s what happens when your entire country buys into the green lie about Co2. You’re all punishing yourselves for the fantastic technology of the modern automobile.

      • Hahaha ha … esp. the People’s Republic of Oakland. I drove the city streets once, from the Airport to Hwy 13 to avoid a traffic jam. Now I need 4-new shocks, and two tires, and new suspension linkage.

  3. I left California in 2012, having lived there the previous 5 years. The whole time I lived there, I never paid less than $4/gallon. It was brutal.

    • House-arrested Canadians are currently paying roughly $3/gallon. They still believe all of those so-called ‘road taxes’ are actually being spent on roads.

      • Same here in Illinois! Even after the reent huge tax hike, roads are STILL in lousy shape, and getting worse! THANK you, governor Pritzker! THIS is what we get when ‘some’ people vote for a Democrat!

  4. Becerra deliberately mislabeled the gas tax repeal and thus the repeal started by DeMaio lost. Becerra has sued the Trump administration more than 30 times if I recall correctly. He defends illegal immigration to Calif. The results of Calif policies by the Democrats are very evident.

    • Best I can tell, the law suit against SK and Vitol is over $0.01 per gallon price fixing. While the state squanders the nearly $1/gal taxes on fuels. (Ignoring the Federal Excise Tax of $0.18/gal which is small compared to the other costs and taxes on fuels in the Golden (Fleecing) State.
      To me, this law suit is just an attempt to divert attention away from state malfeasance and towards industry, typical of this state’s management of their failures.

      • We Californians humiliated Gov. Gray Davis and tossed his ass OUT of this State when he increased our Auto Registration fees … to PUNISH US … for driving. We replaced him with that IDIOT Arnold Schwarzenegger who now tours the world telling us how bad we are for driving our cars.

        Now …we pay dramatically increased auto registration fees, higher sales taxes (nearly 10%), huge bridge toll increases, carbon taxes, and increased gasoline taxes thanks to Jerry Brown. So … why are sheeple of CA … suddenly so willing to punish ourselves? We wouldn’t stand for it when we booted Gray Davis … but now we do? What has happened to “my people”? The CA people? Who are all these new masochistic CA residents? And where did they come from? Who are these people who happily pay these taxes as some sort of tithe to Gaia? We native Californians were never THAT twisted. A little fruity, a little nutty, but never self abusive like these FAKE greenies.

  5. Step 1: Politicians impose X on citizenry.
    Step 2: X annoys citizens, costs money and jobs, occasionally kills people.
    Step 3: Politician announces investigation into how X happened.

    Newsom and Becerra have merely inserted Step 2.5, which is to announce before the investigation that greedy businessmen are at fault.

  6. Kalifornia is a great state, but unfortunately is is infested with socialists (not all Kalifornians, as witness commentators herein). Sanctuary cities for criminal aliens, homeless welcome, high taxes, Federal Judges District 9, water for pupfish but not farmers, etc. What future does any sane resident see? I bet Willis sits on his porch and stares out to sea, in order to preserve his sanity. Stay sane and safe.

    • I lived in Taxifornia for 4 decades until I couldn’t take it any more and left as a political policy refugee. I watched the state digress from an example of unmitigated success to become the blueprint for how a government run by a super majority of far left insanity can destroy a healthy economy and those who built it.

    • I, too, am a California economic refugee. 28 years in the Inland Empire, and my family and I escaped in 2008. We moved to Maryland, which is becoming California east. In 2014, I moved to Virginia, and enjoyed a 6 year respite. But the Dems have taken over this state as well, and are rapidly propelling it to socialism. I’m hoping we can find a stable, sane state for my retirement.

      • I’m hoping we can find a stable, sane state for my retirement.

        Now I don’t know about being sane, …. but West Virginia has been stable for the past 100 years or so.

        A decent place to retire ifffen you just want to set back and take it easy, go fishing, hunting or whatever.

        Buy a place with “free NG” and living is a lot easier. 😊

      • Michael S Kelly:
        We are the Dopacraps. Resistance is futile. You will be assimilated to service us.

    • Ron L.,
      Sadly, what you and others who replied say is self evident. Commifornia was once a shining example of American federalism. With the corruption of the schools and the unabated invasion by Mexico it is well on it’s way to becoming a third world hell-hole!
      If we could only cede SF and LA counties to Mexico or China the rest of the state would be majority conservative. Maybe throw in Sacramento and it’s suburbs due to the high concentration of criminals; whoops, I meant politicians! Now living in the mountains of the Southwest, I find it difficult to return to visit family and friends due to the obvious degradation of the environment and political situation. Gas here is fluctuating around $1.50/gal. and I don’t have to leave the guns at home or locked up!

    • OPEC is an agreement between nations in their political capacities as nations. It is therefore immune from legal action under the Foreign Sovereign Immunities Act (28 USC §§1601-1611). Further, the actions of OPEC are the results of non-resident aliens who act entirely outside of the territorial jurisdiction of the United States. Those actions are not within the jurisdiction of courts sitting in the United States.

      • When has a pesky thing like the law ever stopped alarmist before? And remember that sometimes the purpose is, not to win, but to bleed you dry through legal fees.

  7. I read in a CA newspaper yesterday (The Press Enterprise) that the alleged price fixing amounted to an approximate 1 cent a gallon increase in the cost of gas statewide.

    If Newsom is so concerned with the price of gasoline in his state then he should get ride of some of the outrageous taxes consumers must pay on each gallon of gas.

    This investigation is just an attempt to deflect the blame for their high gasoline cost.

    • Costs that government benefits from: Good.
      Costs that private companies/individuals benefit from: Bad.

  8. I would have thought driving up the price of fossil fuels would have elicited cheers all round for helping to save the planet. What am I missing here watermelons?

    • We have the same idiots in BC here in Canada, maybe it’s something about the left coast.

      The BC government has enacted policies to drive out refiners, they are trying to block a new pipeline from AB, they support a carbon tax and they are toying with legislation to ban new ICE vehicles in 2040.

      At literally the same time they complain about the high price of gasoline and demand the federal government “do something about it” and publicly muse about attracting new investment for a refinery.

      I can’t make this up
      So much stupid, so little time to mock it all

    • observa:

      You are missing the fact that CA politicians need something to distract from the financial mess the CA government is in today.

    • They honestly thought that someone else was going to be the one who had to pay more.

      • That’s how pathological leftism works. They all think they’ll be the Fearless Leader dispensing the Great Leap Forward with the next Five Year Plan. They’re not really big on comprehending the fallacy of composition until it’s too late with the Gulags and Pogroms interring and slaughtering millions. It would be nice if there was an effective vaccine for the affliction but alas it appears immunity disappears with a generation or two.

  9. Last summer I was tasked to do a team run from San Antonio, TX to Hayward, CA which is South of Oakland and North of San Jose. I fueled at the last Loves truck stop on I-10 in Arizona before entering California. We made it up to Hayward, bumped two docks there and then went down to a warehouse in San Diego right on the border where some freight was taken off and some put on and then refueled when we got in Arizona again. By design we didn’t spend a dime in California for anything. I do the same in Pennsylvania because of their high fuel taxes. Any interstate trucker that fuels in those states when not absolutely necessary is a fool.

    • Exactly. If you read between the lines of this complaint it is obvious that they think a supply disruption should have no impact on the price of a product. But anyone who has taken Macroeconomics knows a reduction in supply, without a corresponding decrease in demand results in a higher price point. Which is the most efficient way to distribute the reduced supply. Higher price by itself reduces demand by encouraging people to use less.
      The only other choice is government control of the price structure. Which results in shortages. And gives the government more power to decide who gets what, and who pays what. Which is the end game in most of these lawsuits. They already regulate the production side so much that new production is cost prohibitive. Now they want to control the complete distribution network.

      The lesson here is the economic cost of having “explosions at gasoline refineries that produce 10% of your gasoline supply”. If you can’t prevent it, than you should have enough over-capacity to maintain the supply when some goes down. And distribute the refinery throughput capacity so any one failure is manageable. And most of the refinery regulations are designed to do the opposite.

      The government of Kalafonia has their fingerprints all over the refinery capacity problem, in addition to the new taxes, and is looking to shift blame, to the “providers” of an essential product. The bureaucrats tied a dynamic system into a brittle knot of regulatory power creep. And now that the weakness of this socialized regulatory decision making is obvious to consumers, a greedy profit based witch needs to be burned at the stake. Which will decrease supply and increase prices even more.
      We don’t get fooled, again.

  10. Perhaps Mike Moore has rattled their pickets with the public/private partnerships screwing over the grandmas to save the planet. Just a minor turf war. LOL.

  11. California is the crash test dummy for Socialism/one party rule in the United States, proud of it. After a month of quarantine $21B surplus in the state treasury is gone and there’s a huge projected shortfall come the fiscal year budget…. July 1. Massive taxes, business fees, and high housing costs are slowly forcing corporations to move elsewhere, like the once dominant aircraft industry did. The elites in CA are slowly proving that you can’t eat weather and welfare doesn’t replace lost revenues.

  12. My understanding is you have 3 factors that make California gasoline prices higher. First, taxes on gasoline. Two, climate change/carbon taxes on the refineries that produce the gasoline. Third, and perhaps most important, is because of the special clean air requirements, California gasoline is different from that in rest of country. So you cannot ship in gasoline from anywhere else to deal with refinery issues which will pop up from time to time. The third factor is the one that creates the spikes.

    • There is a fourth. Local oil supply. Nothing new is allowed. No frac’ing. Almost all oil is imported from the middle east.

      • Number 5, old refineries are shutdown and protesters/government don’t allow new ones to be built.

  13. So if gas is selling for around $2.74 per gallon and the tax is 0.80, then they are paying a 29% tax rate? This is above and beyond purchasing, licensing, and operating taxes on cars and trucks. It really makes on wonder what they are doing with all this money? Just how corrupt and incompetent is the California government?

    Government clueless and out-of-control. And now their voters are coming here to Texas and we end up with dysfunctional cities like Austin. I am beginning to wonder if people really are capable of governing themselves. Some are, but many simply are not. Our public school system is designed to create more dysfunctional voters incapable of understanding economics and history – that is at least one root cause. Incoming migrations of people who just want the government to take care of them is another.

    More and more the U.S. political trajectory is reminding me of the Fall of the Roman Empire. First the political core rots out, then the government becomes weak and dysfunctional. Revenues fall, infrastructure starts to crumble, people stop caring, and finally the “barbarians” are at the gate. We seem to be about halfway there. I think we can all watch California as a case study in how the transformation takes place – assuming the Californians do not wake up and push back.

    • I read recently that Gov. Newsom wants to give coronavirus aid money to illegal aliens.

      • Newsom apparently is getting ready to invest at least $1 billion of Calfornia’s money in a fund that benefits China and Chinese defense industries.

        I would think Newsom would want to invest in funds that benefit the U.S. and the U.S. defense industry. Especially now. But I guess not.

        Newsom needs his hearing checked. I think he is tone deaf.

  14. The raise the gas taxes to ostensibly save the planet by making gas less affordable, thus incentivising the consumer to use less gas and/or switch to non-fossil fuels.

    So how can they object to higher gas prices, isn’t that what they want?

    • “So how can they object to higher gas prices, isn’t that what they want?”

      I don’t think they are objecting to higher gasoline prices. What the politicians are objecting to is being blamed for the increased costs, so they want to deflect blame from themselves by blaming the oil companies.

  15. Yawn. Oh! Another decade has passed.

    Californians keep electing Democrats…

    Roughly every decade or so, California surfs (see what I did there?) get all twitchy about the cost of gasoline; they’re sick and tired of seeing people in other states pay WAY LESS for gas.

    More California Democrats are elected…

    Californians stomp their little feet and, by god, DEMAND an investigation, and every 10 years the answer is the same. CALIFORNIA GASOLINE COST MORE BECAUSE OF GOVERNMENTAL REGULATIONS AND TAXES.

    More California Democrats are elected…

    Please wake me in time for the 2030 investigation.

  16. For the folks with long memories – or perhaps those of you with a little time and curiosity – should you do some checking on that 2015 refinery fire, the bigger scope of this grotesqueness become even more clear.

    Responding to ever-tightening state environmental rules, Exxon installed extremely expensive filtering hardware at their Torrance plant.
    This is what caught fire in 2015, shutting down the plant.
    Immediately recognizing the major market disruptions looming, Exxon asked for a temporary environmental waiver to simply revert to pre-2008/9 (?) filtering levels as that hardware was still in place.
    State said no.

    So … here you have extreme filtering processes mandated, they malfunction, and – lacking any practical sense of awareness – the state forces a continuance of plant shutdown and ensuing shortages/high prices.

    A few months later, a quietly enraged Exxon sold the refinery for peanuts to a new buyer.
    This is but one of a slew of examples why so many businesses and productive people are either fleeing California or are adamantly refusing to have any formal (aka be vulnerable to legal blackmail) entanglements with this rogue Marxist entity.

  17. “Wind, solar & biofuel energy are not clean, green, renewable or sustainable. They’re horrifically destructive to vital ecological values. Turbines are comprised of 5,000,000 lbs of concrete, steel, aluminum, copper, plastic, cobalt, rare earth, fiberglass & other materials. Every step in mining, processing, manufacturing, transportation, installation, maintenance & removal process requires fossil fuels.  A solar facility destroyed 500-year-old yuccas & Joshua trees. Ethanol & the corn, water, fertilizer & fossil fuels required to create this “clean, green, renewable” gasoline substitute emits lots of CO2 when burned.”  We’d be better off using fossil fuels after all.”

    Wind, Solar And Biofuel Energy Are Devastating Planet EarthPAUL DRIESSEN MAY 7, 2020

  18. Hate for the automobile because it uses fossil fuel is policy from the climate change alarmists like the UN and green NGOs. These eccentric folk are working like white ants in all levels of government, doing quiet acts like making bicycle and parking lanes where there was once auto traffic lanes, increasing fuel costs to the consumer, supporting electric vehicles in various ways. Idealism has gone mad. Your fundamental liberties are being sabotaged by green left drones in myriad ways.

    • Don’t get me started on the bike lanes. And you’re right … these lanes … the TAKING of automobile lanes are done at the local level. The most idiotic I’ve seen is in the city of Concord. They have an area of the city that has broad, wide, multi lane (as many as 3 lanes each direction boulevards. In this area, you will find a mid rise hotel, shopping malls, a huge “central” post office, Auto-row, Home Depot, and a waterpark … all … all … utterly dependent upon trucks and automobiles for every part of their operation.

      So what do the progresssssssive planners and engineers in the city of Concord do? Yep … whittle down all but one main thoroughfare to a single automobile lane surrounded by multiple solid and dashed lines defining an imaginary median between auto bike lanes. I go to the Home Depot often, and drive all these roadways … I’ve yet to see a single biker. Not one. It’s not an area of the city conducive to bike riding. When was the last time you rode your bike down to the local Home Depot to pick up a load of 4×6 fence posts? Yet every road surrounding the Home Depot is a single auto lane + bike lane … with seemingly random strips of dashed lines allowing auto penetration. It’s not one of those “Bike Share” Lanes like my City has painted everywhere … but dedicated bike lanes … surrounding The Home Depot.

      Idiocy.

      And a desire to turn America into Beijing … with more bike riders than automobiles. And of course … everyone wearing masks. Because … safety.

  19. Lots of trips (pre-lockdown) to SoCal, and the procedure is: Fill up at home, leave home, gas up in western Arizona, when in California try to put just enough gas in the tank to get back to Arizona, gas up in western Arizona, drive home. Save money.

  20. I don’t know guys….My prejudice is to automatically trend to the ‘you lost a significant percentage of your capacity, of COURSE prices are going to go up!’

    However, after reading the complaint, IF Vitol and SK were cherry picking certain trades to report to OPIS, and executing offsetting trades at a lower price (which were NOT reported to OPIS) that is extremely bad. You report all of your trades, or none of them. At the very least, if this was happening, there was a breakdown in corporate governance.

    Always room for error in interpretation, but it’s not as clear cut as one would think.

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