This past week, gasoline prices in California have shocked many due to its severe price surge. According to the Wall Street Journal, gasoline prices jumped 50 cents a gallon this past week to a statewide average of $4.67 per gallon for regular unleaded gas on Oct. 8, 2012, hitting an all-time high. California is the largest fuel market in the nation- yet it seems to be struggling to keep up with this energy shortage.
This sharp increase was largely due the shutdown of a major oil refinery located in Torrance, Calif., belonging to Exxon Mobil Corp. Temporarily forced to halt their oil supply after losing power and temporarily stopping service, it has resumed production on Oct. 5. However, enough damage had already been done to countless Californians.
“It’s ridiculous that I’m paying almost $5.00 for a gallon of gas,” said Young Kim, a 35-year-old resident in Studio City. “I can’t even imagine filling up my tank anymore.”
Though many may point to the shutdown of the refinery for this gas price spike, Sen. Dianne Feinstein have requested the Federal Trade Commission to investigate the price rise as residents need protection against malicious trading schemes. She further asked them to find out if the price spike has been caused by illegal manipulation of the market and to start looking out for manipulation, fraud or other unlawful trading practices in the market.
“California’s consumers are all too familiar with energy price spikes, which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity,” said Sen. Feinstein in her letter to FTC Chairman Jon Leibowitz according to the Wall Street Journal.
Catastrophes like these highlight California’s need to monitor malicious trading practices more closely and make sure residents do not further suffer from price hikes. With some people spending as much as $6.65 for a gallon of gas in Long Beach according to GasBuddy.com, Californians are facing extreme economic difficulties with the constant rise in gasoline prices. Though the refinery has resumed production, and Gov. Jerry Brown has sought to alleviate the situation by ordering the production of winter-blend gasoline earlier than usual this year, it cannot make up for the extreme prices that Californians have been facing in the past few days, and will continue to face until the prices ease.
