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Legislators Vow to Tackle Rapid Rise in Gas Prices

At a hearing, California lawmakers say they will expose the cause and, if necessary, impose new industry regulations.

March 27, 2004|Elizabeth Douglass | Times Staff Writer

State legislators Friday took their turn assailing California's high gasoline prices, pledging to expose the cause and fix the problems by passing new laws, if necessary.

But it was unclear whether the Assembly Transportation Committee, which held the Los Angeles hearing, would follow one lawmaker's suggestion to delve deeper into the reasons behind the state's high gas prices by questioning oil industry executives under oath.

As average pump prices hover well above $2 a gallon statewide, many politicians have been publicly pressuring the oil industry to boost gasoline supplies and steady California's volatile fuel markets.

Friday's hearing, hosted by Assemblywoman Jenny Oropeza (D-Long Beach), followed a similar panel discussion this month led by Atty. Gen. Bill Lockyer. In addition, the Federal Trade Commission is reviewing what it called anomalies in California's gasoline market.

The political interest was sparked by a swift run-up in gasoline prices that began in February and has yet to subside to levels in line with local wholesale fuel prices. The statewide average price for self-serve regular hit a record high of $2.18 a gallon March 6, and has since fallen only slightly, to $2.132 on Friday, according to the Automobile Club of Southern California.

"Gasoline prices are affecting every family in this state," said Oropeza, who is chairwoman of the Assembly Transportation Committee. "It is incumbent on us in the Legislature to get to the root causes and to come up with solutions."

Oropeza did not endorse any specific plan, noting that certain factors affecting gas prices -- such as the global price of crude oil -- cannot be legislated. However, she said the state should look into ancillary issues that may be controlled, such as regulating the mix of company-owned and independently owned gasoline stations or the timing of planned refinery shutdowns.

Anita Mangels, a spokeswoman for the industry trade group Western States Petroleum Assn., urged the committee to resist using legislation to intervene in the market. The wild swings in California gas prices, she said, reflect the widening gap between supply and consumption.

"We don't have enough refineries," Mangels said. "We have demand that is growing exponentially faster than the capacity to produce, and nothing short of addressing that issue in the long term is going to solve the challenges."

Mangels said the oil industry and gasoline market have been probed repeatedly, and no evidence of wrongdoing has emerged. "Last year alone, I can think of at least four investigations that were conducted by the FTC, the California Energy Commission and others, all of whom found that there was absolutely no market manipulation, no gouging, no anti-competitive or illegal activities."

State Sen. Joseph Dunn (D-Santa Ana), who attended the hearing as a guest, was openly skeptical of the industry trade group's explanation for California's erratic prices, and recommended that the committee get more aggressive and call industry executives to testify.

"You truly will not get forthright testimony without employing the oath to all witnesses," said Dunn, who led a state investigation into manipulation of the electricity market.

Oropeza later said she hadn't decided whether to put witnesses under oath at the next committee hearing on gas prices, which is set for Thursday. She added, however, "I imagine we will have more than just these two hearings, and we may have one or more CEOs come to us."

Stan Luckoski, a spokesman for ChevronTexaco Corp. in San Ramon, said his company would "respectfully decline" such an offer. The hearings "invariably lead to inquiries into specific product and supply circumstances, and due to the sensitive, competitive nature of those subjects, we cannot discuss them in a public forum and, in particular, in the presence of our competitors."

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