Despite a 16 percent drop in crude oil prices last week, San Diego gas prices are still higher than the national average.
According to the Utility Consumers’ Action Network (UCAN), the U.S. Department of Energy is reporting a national gas price average of $1.26 per gallon. San Diego stations are charging an average of $1.42 per gallon.
UCAN’s figures show prices throughout the rest of the country are more in line with the Department of Energy’s estimates:
– Sacramento – $1.29.
– Amarillo, Texas – $1.28.
– Oklahoma City – $.97.
It’s not just San Diego , Los Angeles is registering higher prices as well. UCAN found that Los Angeles’s average gas price is $1.34 a gallon.
Charles Langley, spokesman for UCAN, said the price difference between San Diego and Los Angeles is the result of fewer independently owned stations competing against bigger chains.
Ten years ago, there were 140 independent stations in San Diego , today there are about 70.
Langley said that the big refineries can manipulate local prices because there are more company-owned stations (720) than independents.
Contrasts International Market
The high prices are in stark contrast to news in the international oil market.
Crude oil prices dropped 16 percent last week following an announcement by President Bill Clinton saying he is considering approving a measure that would sell U.S. oil “from strategic reserves.”
The sale proposal comes as a result of a cutback in production by the Organization of the Petroleum Exporting Countries (OPEC).
The cutbacks are being considered because OPEC is exceeding its daily production limits, and selling some of the U.S.’s reserves would keep prices stabilized.
According to UCAN, San Diego’s average gas price has dropped only two cents in the past month.
Anita Mangles, spokeswoman for the Western States Petroleum Association, said the prices between San Diego and L.A. are actually better than they’ve been in the past, and that the refineries shouldn’t be blamed for the differences.
FTC Probe
Some officials are still eyeing the oil industry.
The Federal Trade Commission is currently investigating California refineries for their pricing practices, and a class-action lawsuit by a local law firm against seven California refineries is heading for trial.
The suit charges the refineries with willful price fixing. It was filed in 1996 after the introduction of state-mandated reformulated gasoline.
Prices jumped after the gasoline’s introduction, but instead of dropping after an “initial shock recovery period,” prices remained high.
Attorneys in the suit reached a settlement agreement earlier this summer with Unocal Corp. that released the refinery from the suit without admitting guilt.
Unocal spokesmen have said the settlement was agreed upon because the company no longer sells gas or owns refineries in California.
