Think back to October; there were wallet woes for thousands of Californians trying to get from here to there.
Everyone understands a shortage putting a squeeze on available gas, and the frantic dash to fill up on what was left, pumping up prices.
But a newly released report by McCullough Research says no real shortage existed and thus no reason for drivers to be funding a 66-cent-per-gallon windfall profit for oil companies.
Analysts claim that unfair profit added up to $25 million extra dollars per day.
“We ended up with more gasoline in the spike that when he had started. In other words we were increasing our supply at the same time we were hearing that there was a shortage. That’s consistent with behavior where one of the major players is holding back supply.” said Robert McCullough, Jr., managing partner of McCullough Research.
By analyzing emissions reports, McCullough also says he sees evidence that supposed refinery shut- downs couldn’t have compromised supply because some kept producing.
“Fool me once it’s your fault. Fool me twice it’s my fault, as in that old saying. Well we’ve apparently been fooled twice,” said McCullough.
The spokesman for the Western States Petroleum Association says McCullough’s revealing nothing that shows inappropriate behavior.
“Refineries often when they’re down for maintenance…only a portion of the facilities might be down. Other parts are operating,” said Tupper Hull.
According to Hull, permitting challenges and lack of community support for new refineries is what really sets up any pricing pinch since California produces roughly the same 40 million gallons that get used every day.
“We’re a very tightly balanced market. We have the ability in California to produce just about as much fuel as we use…We have a very limited capacity to replace the supply lost by those disruptions. That has the tendency to cause the market to react in a very volatile way,” said Hull.
Based on McCullough’s report, federal lawmakers on the west coast are asking the Department of Justice to do a refinery by refinery investigation to get answers for consumers.
Tupper Hull says oil companies welcome that since they haven’t been found at fault in the past and he doesn’t believe they will be now.
Federal probe or expanded capacity, just like the mixes of fuel sold in California, It will take a special blend of ingredients to find a real solution.
Chevron, the only oil company out of the 7 that service California to respond to FOX40’s calls, couldn’t comment on the validity of McCullough’s research.
Representatives did offer a statement saying California’s “unique specification for gasoline…makes it more vulnerable to supply disruptions and high taxes on gas.”