Consumer Advocates Accuse Gas Companies of Price Gouging

Photo (cc) by JeepersMedia

If you live in California and think you’re paying too much at the pump, you are likely not imagining it.

Consumer Watchdog, a Washington, D.C.-based advocacy group, said in a press release Oct. 13 that it found the gap between wholesale and retail gas prices is at an historic high in the state, signaling what they call price gouging.

Their analysis showed that in August and September, gas companies were selling gas for $1.20 more per gallon at the pump than they paid for it. The watchdog group isn’t arguing against the companies making a profit, but they say the historical average markup is 77 cents per gallon.

“All levels of the oil industry are raking it in” at the customers’ expense, said Jamie Court, president of Consumer Watchdog in a release. “The lack of competition in the market is the result of four refiners controlling 78 percent of the state’s supply and these companies using their market power to drive up prices and drive away competition.”

The group said the high prices were also the result of low inventory. However, they assert that gas inventories were low because gas companies were intentionally keeping them low, not as a result of market forces.

The group presented its findings during testimony at the California Energy Commission’s Petroleum Market Advisory Committee. They urged the state to mandate greater transparency and force companies to publish more economic data so people can better understand where high prices are coming from.

What do you think is a fair markup for gas? Share your thoughts in comments below or on our Facebook page.

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

The 3 Worst Money Mistakes You Are Making at the Gas Station
The 3 Worst Money Mistakes You Are Making at the Gas Station

Beware these cash-guzzling missteps when you stop at any gas station.

Not Asking About This in the Hospital Can Cost You Thousands
Not Asking About This in the Hospital Can Cost You Thousands

Medicare recipients who fail to clarify their hospital status can pay a high price.

10 Cars That Lose the Most Resale Value After 5 Years
10 Cars That Lose the Most Resale Value After 5 Years

Two types of vehicles are especially likely to see steep plunges in value.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.