Mark Leno, via Senate website
A California legislature has floated an idea aiming to curb gas price manipulation in the Golden State, PolitiCal says. State Sen. Mark Leno’s bill would create an Office of Fuel Price Investigation and Manipulation Prevention at the California Energy Commission.

According to Leno's press release, the legislation "will help protect California consumers against erratic pain at the gas pump." Last year, drivers in the Golden State experienced some of the most drastic gasoline price spikes in the state’s history. In many places, gas rose to over $5 per gallon. While fuel producers pointed to a perceived supply shortage, industry experts concluded that price manipulation might have been a factor in the volatility, according to the release.

“California’s economy has struggled to absorb the erratic spikes in gas prices in recent years, which have impacted consumers, families who are already scrambling to balance their budgets, and small businesses,” said Senator Mark Leno, D-San Francisco. “For too long, Golden State drivers have been at the mercy of a few major oil companies that control the state’s transportation fuel market. We clearly need a process by which we can protect consumers against fuel price volatility and investigate potential cases of price manipulation.”

Senate Bill 448 creates a new office of Fuel Price Investigation and Manipulation Prevention at the California Energy Commission. That new office will develop anti-fuel price manipulation standards, investigate potential incidents of illegal activity and develop recommendations to reduce California’s fuel price volatility that is associated with fuel producer market power.

During last year’s gasoline price spikes in California, fuel producers indicated that unexpected refinery slowdowns created a gap in fuel supply. However, McCullough Research, an independent energy consultant, found that gasoline inventory levels had in fact increased in California at that same time, indicating other market forces, possibly the withholding of supply, were likely at play.

Six U.S. Senators from the West Coast, including Senators Dianne Feinstein and Barbara Boxer of California, addressed their concerns about the concentration of the refinery market to U.S. Attorney General Eric Holder in a letter late last year. They explained that due to the isolated fuel market on the West Coast, inaccurate information about the shutdown or slowdown of one production facility could impact gas prices for tens of millions of consumers.

SB 448 is supported by numerous consumer and environmental protection groups, including the Greenlining Institute, Consumer Federation, Consumer Action, Sierra Club and the Environmental Defense Fund.