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California begins to see if drivers are raising prices at the pump

SACRAMENTO, Calif. (KTXL) – California lawmakers held investigative hearings Thursday in response to skyrocketing gas prices.

It comes as the state’s gas tax will rise another 3 cents starting Friday.

The Assembly’s Select Committee on Gas Supply and Prices held its first hearing Thursday to determine whether California consumers are getting price hikes at the pump.

“It’s no surprise that gas prices have risen nearly $2 per gallon in the last few months, an inexplicably sharp increase,” said Assemblymember Jacqui Irwin, D-Thousand Oaks.

The California Energy Commission provided a presentation showing how domestic oil sources are shrinking, while the state’s consumption of foreign oil is growing.

It also provided a look at the price breakdown at the pump, showing the various taxes, fees and other costs that make California gas more expensive than the rest of the country.

Experts said brand-name gas stations were charging about 30 cents more per gallon, and some suggested California should look at why the state doesn’t have more unbranded gas stations.

“Concentration among gasoline producers, combined with downstream vertical relationships with their brand dealers, has allowed them to charge higher prices and make higher profits in California than by contracting individually, one-on-one,” Severin said. Borenstein, UC Berkeley Haas School of Business.

For years, the state has been investigating mysterious surcharges on California gas prices that some experts say gas companies haven’t told them about.

But representatives of petroleum companies and gas station owners return to the state when prices rise.

“The reality is that our members pay countless fees, license fees and permit fees to meet the enormous compliance burdens that are eating away at our industry and state,” said Sam Bayless with the California Fuels and Convenience Alliance.

The state Department of Justice told lawmakers that the investigation into the mysterious surcharges and price-fixing would require enormous resources.

“It’s very expensive, bringing in the outside expertise that’s specifically needed, many millions of dollars, and the outcome is uncertain,” said Kathleen Foote of the California Department of Justice.

Going forward, the committee will hold hearings with industry experts, regulators and consumer organizations over the next three to four months. The committee’s next hearing date is yet to be fixed.

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