Thursday, April 20, 2006


New California gasoline study shows profits are driving up pump prices

A study of California gasoline prices released by The Foundation for Taxpayer and Consumer Rights on Tuesday showed that oil company profiteering is responsible for the current price spikes, not the price of a barrel of oil.
Increases in the "spot" market price of crude oil -- which is the highest price a major oil company would pay for crude oil -- accounted for only 12 cents per gallon. California's percentage sales tax increased fuel prices by another four cents per gallon. More than 40 cents of the 60-cent increase in gasoline prices over 3 1/2 months is attributable to increased refinery and marketing profit margins for the oil companies....

The profit increase of 42 cents, on top of record profits last year, means California gasoline will cost consumers approximately $546 million more in April 2006 than in April of last year.
The full study can be read here.

Since Hawaii's Public Utilities Commission has chosen to interpret Hawaii's gas cap law to set the highest prices rather than the lowest, Hawaii has seen price increases similar to California.

And for the same reason: high prices mean higher corporate profits.


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