Los Angeles Times: Gasoline Prices: a Case of Cheating, Not Competing
If the recent sticker shock at the gasoline pump feels familiar, that’s because it is the same old story that led California’s electricity market to become the embarrassment of the nation.
California Atty. Gen. Bill Lockyer is convening today in Los Angeles a panel of industry experts who have blamed the run-up on OPEC crude oil prices, environmentally sensitive fuel and free-market pressures. But the problem is as simple as California’s electricity crisis turned out to be: A few giant energy corporations have manipulated supply to keep profits high.
During the blackouts, electricity barons like Ken Lay blamed the crisis on overuse and market restraints, but state investigations later found the real problem was that unregulated electricity plants were strategically shut down to reduce supply and make prices skyrocket.
Similarly, California’s special gasoline formulation � as required by the federal government under Clean Air rules � has been made to appear rare by the small number of refiners that make the special mix and have gradually closed refining plants.