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Economy

California Consumer Advocates Complain About Record Oil Industry Profits

California Consumer Advocates Complain About Record Oil Industry Profits
Oil refineries are under fire for gas prices that are sharply higher than the national average. Consumer Watchdog is asking for more oversight.

Consumer advocates said oil refineries are logging record profits as the state's drivers pay gas prices well above $4 a gallon.

Consumer Watchdog looked at refinery margins, which is the cost and profit calculated for every gallon of gas that's refined. The historical margin averages about 46 cents a gallon. The current margin is $1.17.

Oil industry officials said that number is misleading because it includes both cost and profit. They blame recent prices on refinery outages.

The issue is getting attention because California's average price is about $1.10 above the national average price. The difference is even sharper in Southern California where prices are nearly $1.40 higher.

Consumer Watchdog's Jamie Court said the state needs to step in to regulate prices.

"What's really outrageous is we're over $4 a gallon and the price of crude is more than half of what it was the last time we were over $4 a gallon. It's between $50 and $60 a barrel," Court said.

Current gas prices are uncomfortable for all California drivers, according to Tupper Hull of the Western State's Petroleum Association. He said the soaring prices are linked to a series of refinery outages that create gas shortages.

"The market can react with a lot of volatility and you will see big swings in prices," Hull said. "Right now we're seeing truly one of the largest differentials between the national average and California prices than we've seen in a very long time."

San Diego's average price for a gallon of regular is a $1.44 above the national average.

Consumer Watchdog is asking the governor and state lawmakers to intervene with a windfall profit tax. They also hope the refining industry shares more information about their business.