California sued two multinational gasoline trading companies Monday, alleging they ran a scheme that jacked up prices at the pump from 2015 to late 2016.
Democratic Attorney General Xavier Becerra said the companies took advantage of market volatility following a 2015 explosion at a gasoline refinery complex in Torrance to make about $150 million a year in illegal profits. Consumers paid roughly 1 cent per gallon more under the scheme, Becerra said.
The suit accuses gasoline trading firms Vitol Inc. and SK Energy Americas, including its parent South Korean company SK Trading International, of raising gas prices statewide in a highly technical scheme. The lawsuit alleges the companies engaged in market trades to artificiality inflate the cost of regular and premium gas following the disruption to the state gasoline supply after the 2015 explosion.
Vitol, headquartered in Houston, did not immediately return an email seeking comment. SK Energy Americas could not immediately be reached.
The allegations involve officials from both companies who knew each other and secretly worked on the arrangement, Becerra said.
Gov. Gavin Newsom and state lawmakers asked Becerra last fall to investigate high gas prices after a report from the California Energy Commission found drivers overpaid an average of 30 cents a gallon. Even accounting for California’s strict standards and taxes on gasoline, drivers paid an additional $11.6 billion at the pump over the past five years, the California Energy Commission said in its report.
The investigation that sparked Monday’s lawsuit was underway before that report, Becerra said. But this case is “probably not the only reason for gas prices being higher than they should,” he said, adding that his office is still investigating other reasons for the high prices.
“People know in their gut when something isn’t right,” Becerra told reporters. “We’re here now to prove to court that in this case we nabbed a couple of the bad actors who have caused the exploitation of gas prices in the state of California.”
Gas prices in California and elsewhere are down amid the coronavirus pandemic, averaging less than $3 per gallon in California, according to GasBuddy. Still, the state’s prices are among the highest in the country.
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