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High gas prices investigated

By Tara Baukus Mello · Bankrate.com
Wednesday, October 10, 2012
Posted: 2 pm ET

Californians who felt like they were being taken advantage of when they filled up their cars at the pump recently may find out they were right. The Federal Trade Commission and the Department of Justice are investigating the recent spike in gas prices after the state saw a 49-cent-per-gallon jump in one week. A gallon of regular unleaded averaged $4.67 throughout the state as of Tuesday, compared to $4.18 per gallon the prior week and $3.81 per gallon a year ago, according to AAA's Daily Fuel Gauge Report.

The $4.67 per gallon price in California on Tuesday was 85 cents higher than the national average of $3.82 per gallon of regular unleaded. AAA officials said that California's high gas prices had skewed the national average and that 32 states as well as Washington D.C. had seen drops in gas prices from the prior week.

The rapid increase in gas prices in California was attributed to low supply due to an oil pipeline problem, a fire at a refinery that stopped gas production and scheduled maintenance at several refineries that reduced gasoline output. California state officials were concerned that oil companies were taking advantage of the situation to drive up gas prices, stating that consumer demand for gasoline was relatively weak. Sen. Dianne Feinstein formally asked the FTC to look into the situation, while separately Sen. Barbara Boxer urged the Department of Justice to investigate.

California Gov. Jerry Brown and the California Air Resources Board granted refineries a waiver to allow them to begin production of the winter blend of gasoline (which is cheaper to produce) as a way to bring price relief to the gas pumps in the state. Typically, summer-blend gasoline, which doesn't evaporate as quickly as winter-blend gas, is used throughout the month of October.

Have your gas prices gone up? Are you cutting back on your driving as a result?

Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.

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