California’s Petroleum Watchdog Issues Market Update and Consumer Advisory Amid Rising Gas Prices

For Immediate Release: September 13, 2024

SACRAMENTO - Today, the Division of Petroleum Market Oversight (DPMO) sent a letter to Governor Gavin Newsom and state legislative leadership providing an update on the gasoline market and consumer advisory amid rising retail gas prices, particularly in Northern California.

The letter details how refinery maintenance, low inventories, and spot market volatility are driving up California gas prices, even as crude oil prices and national gas prices are declining. These are the same market conditions that drove retail gas price spikes in 2022 and 2023.

"We are concerned that the oil industry may take advantage of this situation by taking excessive profits at the expense of California consumers," DPMO Director Tai Milder said. "We will continue to monitor the market, scrutinize industry activity, and call out profiteering conduct."

State officials can better understand supply, demand, and price trends in the petroleum market because of data and transparency tools provided under Senate Bill X1-2, the California Gas Price Gouging and Transparency Law, which took effect last year.

DPMO is an independent division within the California Energy Commission (CEC) that was created as part of the new law. It is responsible for carrying out the activities in the law focused on market oversight and investigation.

The latest price spike is in Northern California, where retail gas prices increased from $4.76 on August 20 to $5.02 on September 12. This is $1.92 higher than the national average. Price increases on the wholesale gasoline market are even larger, which will likely continue to be reflected in retail prices in the coming days. Statewide, retail gas prices increased from $4.60 on August 20 to $4.76 on September 12.

Multiple refineries throughout California have experienced maintenance issues in the past few weeks. In addition, refineries have allowed inventories to decline by about 12 percent since late June, leaving less supply available to stabilize prices and protect consumers. Finally, volatile spot market trading has pushed up wholesale prices, which now exceed national trends by $1 per gallon in the Bay Area and about $0.50 per gallon in Los Angeles.

As prices increase, Milder encouraged Californians to shop around and compare prices between name brand and generic brand gasoline. While some retailers charge more for branded gasoline, all gasoline sold in California must meet the state's high standards for emissions control and engine performance.

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About the Division of Petroleum Market Oversight
The Division of Petroleum Market Oversight is an independent agency within the California Energy Commission (CEC) to monitor petroleum markets and flag potential market manipulation, market power abuse, or market design flaws. The watchdog agency is a key part of the California Gas Price Gouging and Transparency Law, Senate BIll X1-2, enacted in special session in 2023.

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