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Report says retailers responsible for high California gas prices, AG asked to investigate

Governor Newsom has called on the attorney general to investigate possible price fixing and false advertising.

SACRAMENTO, Calif. — In April, Gov. Gavin Newsom asked the California Energy Commission (CEC) to investigate claims Californians were being overcharged for gasoline. The CEC returned their report Monday and now, Newsom is calling on Attorney General Xavier Becerra to investigate the findings.

The CEC said Californians paid up to $0.30 more per gallon of gasoline than people in other states. According to the report, this is equal to an extra $4.50 to fill up a 15-gallon tank.

The CEC report said the major difference in cost does not come from refiner margins, but rather from retail margins. The report specifically called out Chevron, Shell and 76 for increasing their margins in California between 2010 to 2018 by roughly twice the amount of all other listed brands.

Patrick DeHaan, head of petroleum analysis at GasBuddy, said the information in the report needs to be taken with a grain of salt.

“If the data is correct, then they’re clearly onto something,” said DeHaan. “But I’d want to know how they obtained their data.”

RELATED: Gov. Gavin Newsom wants investigation of high gas prices

DeHaan explained there’s a finite amount of sources for good data on retail gas prices.

The CEC report also raised the possibility of false advertising among the big oil companies. It said many companies advertise their gasoline as TOP TIER certified but explains it’s not apparent TOP TIER gasoline is, in fact, superior to other gasoline in California. The report said this is because of the stringent standards already imposed by the California Air Resources Board.

The CEC said it requested research from the gasoline industry to substantiate their claims and none was provided.

DeHaan explained this is a no-brainer.

“Your car is going to run just as happy on X brand as Y brand,” said DeHaan. “I believe they have a distinction, but I don’t believe a consumer could detect that.”

The CEC report explained, perhaps surprisingly, when several gasoline brands increased their prices significantly in California, they did not lose market share. The report gave multiple possible reasons including brand loyalty.

“When it comes to gasoline, I think loyalty is a foolish thing,” admitted DeHaan. “I buy the cheapest gas. I know gasoline is the same across brands.”

Read the CEC report here.

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