but they are indeed price fixiing. Here's a two part series by the LA Times...read one way, it supports his contentions but the truth is far from what he states.
Here's a snip from the middle of part 1:
My view for the industry was: Why in the world would you fight clean fuels? That's what the consumer wants," O'Malley, now the chairman of Connecticut refiner Premcor Inc., said in an interview. Make no mistake about it, the more stringent you make specifications, those become barriers to entry…. Strong companies would have an advantage."
The state's move to strict new fuel formulas helped put 10 of 31 refineries out of business, cutting oil-refining capacity by 20%, according to the state Energy Commission.
The most conspicuous of the casualties was a small refinery in Santa Fe Springs known as Powerine. It closed in 1995 amid heavy losses, but less than a year later its owners wanted a reprieve from the new rules so they could jump back into the market or sell the plant.
The reemergence of Powerine, which could make a significant amount of gasoline despite its small size, was a threat to California's delicate market balance. In a February 1996 internal e-mail, a Mobil executive opined that if Powerine resumed production an expected 10-cent-a-gallon premium could shrink by as much as 2 or 3 cents.
"Needless to say, we would all like to see Powerine stay down. Full-court press is warranted in this case," the Mobil manager wrote in the message, which came to light through a lawsuit and subsequent U.S. Senate hearing. If the refinery were to reopen, Mobil could purchase and resell the output to protect prices, he added, noting that the company had tried that the year before and it "was a major reason" gasoline prices jumped 2 to 4 cents for several months.
Exxon Mobil executive James S. Carter told the Senate panel in 2002 that "we were protecting our investment."
Still in mothballs, Powerine was sold in 1997 to an investment trust run by televangelist Pat Robertson, who planned to spend $130 million to modernize and reopen the plant.
Neighborhood groups that remembered Powerine's environmental lapses had no interest in seeing the plant revived. Robertson accused unnamed oil companies of interfering with his efforts to raise funds for the project. He offered no proof at the time, and he declined requests for an interview.
The restart effort died shortly after a judge blocked construction at the behest of community groups that had accused local officials of insufficient environmental vetting.
Years later, California politicians and consumer activists accused Shell Oil of questionable motives after it announced plans to close its Bakersfield refinery in late 2004 without putting the property up for sale. Shell argued that the refinery's profits were too puny and the plant was too old, inefficient and small to attract serious buyers.
Shell's timing was curious because California refineries were earning record profits.
http://www.latimes.com/business/la-fi-calgas18jun18,0,7589520.story?coll=la-home-headlinesHere's part II:
Zones of Contention in Gasoline Pricing
# Refiners charge each dealer a different rate for the same fuel. They say it's fair, but critics contend the practice helps them boost profits and suppress competition.
econd in a Series
On a recent Wednesday, 72-year-old veterinarian Charles Hendricks filled up his Mercury Grand Marquis at a Chevron in west Anaheim. On the other end of town, 22-year-old sandwich store manager Ryan Ketchum gassed up his Nissan Sentra at a Chevron in Anaheim Hills.
Both men bought regular gasoline. Both pumped the gas themselves. But there was one important difference: Hendricks paid $2.399 a gallon, whereas Ketchum paid $2.539 — 14 cents more a gallon for the same Chevron gas.
Such price variations may seem odd, but they are not unique to Anaheim. On any given day, in any major U.S. city, a single brand of gasoline will sell for a wide range of prices even when the cost to make and deliver the fuel is the same.
The primary culprit is zone pricing, a secret and pervasive oil company strategy to boost profits by charging dealers different amounts for fuel based on traffic volume, station amenities, nearby household incomes, the strength of competitors and other factors.
It's a controversial strategy, but the courts have thus far deemed it legal, and the Federal Trade Commission recently said the effect on consumers was ambiguous because some customers got hurt by higher prices while others benefited from lower ones.
To be sure, other industries vary prices by area too. Supermarkets, for instance, price the same brand of bread or cheese differently in different neighborhoods. But gasoline price patterns provoke a response that bread can't match, partly because other commodities don't fluctuate as wildly as gasoline does and their prices aren't posted by the side of the road.
http://www.latimes.com/business/la-fi-calprice19jun19,1,6659437.story?coll=la-home-headlines
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