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California Artificial Gas Shortage and High Prices Antitrust Class Action

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Los Angeles Highways

Did companies keep the price of gasoline high in California while the rest of the country was enjoying lower prices? The complaint for this antitrust class action claims that a conspiracy kept the price as much as $1.50 higher than the national average, and that Californians paid $10 billion more for gas than they should have.

The class for this action is all persons or entities who paid the retail price for gasoline for consumption by themselves, their families, or their members, employees, or insureds in California that was refined or produced by one of the defendants, between February 1, 2012 and the present, and were damaged thereby.

The defendants include BP West Coast Products LLC, Chevron U.S.A. Inc., Tesoro Refining & Marketing Company LLC, Equilon Enterprises LLC (doing business as Shell Oil Products US), Exxon Mobil Corporation, Valero Marketing and Supply Company; ConocoPhillips, and Alon USA Energy, Inc.

The complaint points to a number of spikes that moved gas prices in California out of line with the national average, including May 2012, October 2012, and February 2015. These had Californians paying more than $4 a gallon and in some areas more than $5, while the rest of the country had a decline in prices.

Although refineries blamed the higher prices on a fire at a refinery in Washington state and maintenance shutdowns, the complaint claims that evidence does not support these explanations.

For example, after the fire, the degree of concentration in the market increased. The complaint says that with that degree of concentration, the timing of the maintenance shutdowns was suspect. It quotes a report by McCullough Research as saying, “In a competitive market, maintenance would have been delayed to take advantage of rising West Coast prices.”

Data from the US Energy Information Administration showed that West Coast refineries could meet significant shortfalls.

Also, during some of the shutdowns, emissions information seemed to show that the refineries were still operating.

In addition, the complaint points out that an Exxon Mobile tanker could have been used to bring in supplies, but the company kept it on the Gulf Coast for four months, then sent it to idle in Singapore for seventy days. When the tanker returned to Los Angeles, it did not offload its gasoline supplies in California, but took them to Florida.

To make matters even worse, during the supposed shortage, refiners shipped gasoline out of the state—not just to other states but to places like Mexico and Chile. A July 2015 article in the Daily News detailed some of these shipments and concluded, “Shipping information makes it clear any recent shortage was created at least in part by the companies themselves.”

The complaint claims the companies have violated California’s Cartwright Act and Unfair Competition Law.

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