Finally, a man-bites-dog story on the energy front. Breaking a weekly streak that goes back to June 16, the average price of regular in the L.A. area is $1.77 a gallon, up about a nickel from last week. (Here's the EDD release) This isn't a big surprise - the daily numbers have been rising since late last week. But the increase comes as oil falls to under $40 a barrel, mostly on continued concerns about slower demand. That, of course, has consumer groups talking conspiracy. Consumer Watchdog says refineries were producing 14.8 percent less gasoline than a year ago for in-state use, while production of gasoline for export out of state was up nearly 45 percent. From its press release:
"The refinery cutbacks are for purely financial reasons, with cuts far exceeding the state's drop in consumption, " said Judy Dugan, research director of the nonprofit, nonpartisan Consumer Watchdog, "Now is the time for government to insert sharper oversight and regulatory controls of the refining industry. Otherwise, low oil prices will not keep translating to lower gasoline prices, and fuel prices are the first thing to prick a damaged economy."
Purely financial reasons? Er, isn't that what businesses try to do - like make money? Actually, the point about regulatory oversight is well taken; California refiners have been allowed to run roughshod over the state's energy market, making it next to impossible to prove hanky-panky. Still, concern about a one-week price increase seems a bit premature.