SACRAMENTO, Calif. -- Governor Arnold Schwarzenegger on Thursday ordered state investigators to expedite a probe into whether oil companies engaged in price gouging and said that California experienced an unusual spike in gasoline prices this spring compared with other regions of the country, reported the San Jose Mercury News.
I want to assure the citizens of the state that whatever the reasons for the spike in gas prices we will get to the bottom of it, Schwarzenegger insisted at a [image-nocss] news conference.
State investigators are focused on a three-week period from April 18 to May 9 in which wholesale gasoline prices in Los Angeles surged to levels about 60 cents per gallon more than those in New York (drivers paid about 42 cents more per gallon at the pump), said the report. While prices are typically higher in Los Angeles than New York, usually the average difference is 19 cents.
The California Energy Commission had planned to issue findings of its gasoline price investigation on September 30; Schwarzenegger ordered the commission to speed up the inquiry and release a report August 15. The state Attorney General's Office is conducting an overlapping investigation, expected to take several months.
Tupper Hull, a spokesperson for the Western States Petroleum Association, said he was confident neither investigation would turn up evidence of wrongdoing. He said many factors unique to Californiafrom high taxes to costly fuel formulas to difficulties in refining and transporting gasolinelead to higher prices. Our industry has been investigated time and again, he told the newspaper, and not once has an investigation found anything illegal or improper in regards to the pricing.
Hull could not, however, explain the large price spike highlighted by Schwarzenegger: We don't have any idea what caused that, he said.
Schwarzenegger's announcement comes on the heels of a Democratic proposal last week that, as reported in CSP Daily News, would allow the state to prosecute oil refineries and wholesalers for manipulating gasoline prices. Currently, the state can only prosecute gas station owners.
With gasoline prices having soared to more than $3 a gallon in California, Schwarzenegger appears to be trying to defuse a potentially explosive political issue, the Mercury News said. His Democratic opponent this fall, Phil Angelides, already is trying to portray the governor as a friend of the oil industry. No oil company in America has its knees shaking because of Schwarzenegger's alleged threat, said Bob Mulholland, a senior adviser to Angelides' campaign. Nothing will come of it.
Since 2003, oil companies and executives have given more than $1 million to Schwarzenegger's campaigns and causes, according to the report. Oil tycoon and major GOP donor T. Boone Pickens has contributed $550,000 and Chevron has given about $515,000.
Angelides also has received contributions from oil and gas companies during his political career, the paper said, although the figures cited by his political opponents are significantly lower than Schwarzenegger's total.
Asked Thursday if he would keep the donations from oil interests if the energy commission found evidence of market manipulation, Schwarzenegger sidestepped the question. I will make always sure, Schwarzenegger said, that my decision-making is always based on what is best for the people of California.
Click here to read the full transcript of Schwarzenegger's press conference, including a video link.
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