Western lawmakers seek probe of refineries

By KEVIN FREKING Published: November 28, 2012
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Six Democratic senators representing states along the Pacific Coast asked the Justice Department on Tuesday to investigate the role of oil refineries in gas spikes that occurred in May and October even as crude oil prices were declining.

Gas prices jumped last month in California to more than $5 a gallon. Analysts said a web of refinery problems were to blame.

But the senators say a review of California refinery emissions data revealed inconsistencies between the time refineries were actually producing petroleum products and when maintenance shutdowns were publicly reported. They said misleading reports of shutdowns could create a perceived shortage of gasoline.

“It is important to note that because the West Coast refinery market is highly concentrated and isolated, inaccurate information about just one refinery being down can impact gasoline prices for tens of millions of consumers,” the senators said in a letter to Attorney General Eric Holder.

They said an analysis by McCullough Research indicates that gasoline inventories were either increasing or remaining at historic five-year averages during the highest price spikes. They said records that only can be gained through subpoena can determine whether various refinery companies violated a Federal Trade Commission rule against “false or misleading public announcements of planned pricing or output decisions.” Violations of the rule subject companies to fines of up to $1 million a day per violation.

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