The Office of the Attorney General Launches Investigation
The Attorney General's investigation will examine whether oil companies or retailers have colluded to violate antitrust laws, run afoul of state laws that prohibit unfair business practices, or violated state law that prohibits retailers from unduly increasing gasoline prices more than 10 percent during government-declared emergencies. Violations of the price-gouging statute are subject to civil enforcement actions or misdemeanor criminal prosecutions.
The Attorney General noted California receives little or no refined gasoline from the Gulf region, and no crude oil. He questioned whether disruptions in the oil and gasoline infrastructure caused by Hurricane Katrina, while no doubt severe, could legitimately explain any significant effect on California's market. "Certainly, the storm cannot be used to justify gouging Californians while thousands of our fellow Americans suffer," the Attorney General said.
The federal government on August 27 and August 28 declared emergencies in states hit by Hurricane Katrina. The Attorney General said he would support calls for Governor Arnold Schwarzenegger to declare a state of emergency in California.
The Attorney General's office has been monitoring the gasoline and oil market in California since 1999. The state's drivers historically have paid some of the highest prices in the country, and suffered chronic price spikes caused by a variety of forces.