SACRAMENTO, Calif. (KTXL) — California lawmakers held an investigative hearing Thursday in response to skyrocketing gas prices.
This comes as the state’s gas tax will rise another 3 cents starting Friday.
The Assembly’s select committee on gas supply and prices held its first hearing Thursday to determine if California consumers are being price gouged at the pump.
“It comes as no surprise that gas prices have increased by almost $2 per gallon in the last few months, a sharp increase that cannot go unexplained,” Assembly Member Jacqui Irwin, D-Thousand Oaks, said.
The California Energy Commission provided a presentation showing how domestic oil sources are shrinking, while the state’s consumption of foreign oil is growing.
It also provided a look at the price breakdown at the pump, showing various taxes, fees and other costs that make California gas more expensive than the rest of the country.
Experts said brand-name gas stations are charging higher prices at about 30 cents more per gallon, and some suggested California look into why the state doesn’t have as many unbranded gas stations.
“I’m concerned the concentration among the producers of the gasoline combined with their vertical relationships downstream with their branded dealers has allowed them to charge much higher prices and earn much higher profits in California, individually, not through colluding with one another,” Severin Borenstein, UC Berkeley Haas School of Business, said.
For years, the state has been looking into a mystery surcharge in California gas prices that some experts said gas companies have not addressed.
But representatives for petroleum companies and gas station owners point back to the state when it comes to higher prices.
“The reality is that our members pay countless fees, permit fees and licensing fees to meet the overwhelming compliance burdens that are eating into our industry and state,” Sam Bayless, with California Fuels and Convenience Alliance, said.
The state department of justice told lawmakers an investigation into the mystery surcharge and price-fixing would require enormous resources.
“It’s exceedingly expensive, particularly bringing in the outside expertise that would be required, many millions of dollars, and the upshot would be uncertain,” Kathleen Foote, California Department of Justice, said.
Moving forward, the committee will hold hearings over the next three to four months with industry experts, regulators and consumer organizations. The committee’s next hearing date is not yet set.