By using this site, you agree to the Privacy Policy and Terms Of Use.
Accept
WhatsNew2DayWhatsNew2Day
  • Home
  • Australia
  • Business
  • Economy
  • Entertainment
  • Gaming
  • Health
  • Lifestyle
  • Science
  • Sports
  • Tech
  • US
  • World
Reading: Opinion: Who benefits from Southern California’s high gas bills? The problem is that we don’t know
Share
Aa
WhatsNew2DayWhatsNew2Day
Aa
  • Home
  • Contact
  • About us
  • Privacy Policy
  • Home
  • Australia
  • Business
  • Economy
  • Entertainment
  • Gaming
  • Health
  • Lifestyle
  • Science
  • Sports
  • Tech
  • US
  • World
Follow US
© 2022 WhatsNew2Day News Network. All Rights Reserved.
WhatsNew2Day > US > Opinion: Who benefits from Southern California’s high gas bills? The problem is that we don’t know
US

Opinion: Who benefits from Southern California’s high gas bills? The problem is that we don’t know

Last updated: 2023/03/13 at 6:30 AM
Jacky 1 week ago
Share
Opinion: Who benefits from Southern California's high gas bills?  The problem is that we don't know
SHARE

Duplication and in some cases quadrupling of Southern Californians’ natural gas bills in recent months came from rapid price increases on the so-called spot market, a real-time wholesale market for the fuel. The lack of transparency in the California spot market for gasoline played an equally important role in the beating California drivers suffered at the pump last year.

The secrecy surrounding transactions in both markets keeps the public in the dark about who is making a fortune off their pain. Transparency would not only reveal profiteers, but could also discourage future extortion.

Southern California Gas Co., the monopoly that provides gas in Southern California, generally uses your stored gas inventory in the winter instead of buying it during the colder months, when it is more expensive. However, this year, instead of tapping into its inventory, the utility chose to buy massive amounts of gas on the spot market, where someone made a fortune off natural gas prices that were 10 times higher than expected. usual.

The public doesn’t know who reaped this windfall, but we want to know. SoCalGas’ parent company, Sempra Energy, has an energy trading arm that sells gas to the utility. Did SoCalGas’ decision to buy in the spot market at a peak drive up the price and help an affiliated company make a killing?

Unfortunately, that remains unclear because natural gas spot market transactions are shielded from public scrutiny. Comparable electricity transactions, by contrast, went public after Enron traders took advantage of deregulation to loot California. Now every electricity trade in the spot market is publisheddeterring such misconduct.

The Federal Energy Regulatory Commission, or FERC, has the power to publish natural gas spot market transactions, but has never done so. The nonprofit group Public Citizen has required the agency to change that. Southern Californians, who just paid the highest natural gas bills in America, have a right to know who got their hard-earned money.

Natural gas isn’t the only fuel Californians have paid significantly more for in recent months. At one point in October, California gasoline prices rose to $2.60 more per gallon than the US average. The huge gap boosted record profits for oil refiners, which doubled its profit per gallon in the West last year, according to its own public reports to investors. Gasoline prices that exceeded $6 a gallon caused untold pain for low-income families, some of whom had to choose between filling their tanks or putting food on the table.

How can oil refineries charge Californians so much more when their production costs, as evidenced by their profits, don’t justify it? California oil refineries set the price they charge station owners for gasoline based not on their costs but on the price of California gasoline on the spot market, a market controlled by the five oil refineries that produce 98% of our gasoline, along with a small group of merchants

Like the analogous natural gas market, the California gasoline spot market is shrouded in secrecy, making it vulnerable to manipulation. The California Attorney General’s Office is suing traders SK Energy and Vitol for allegedly manipulating the spot market after Exxon’s Torrance refinery low in 2015. The companies are accused of, among other things, conducting swaps in which no gasoline changed hands solely to increase the price of fuel.

This is possible because there is no public ledger of transactions in the gasoline spot market, only voluntary reporting for the Oil Price Information Service, an oil industry news service. Nothing requires disclosure of a trade, its amount, or the identity of the buyer or seller. There is also no record of how many transactions occur on any given day. The service publishes only a spot market price.

That means a single transaction can set the price for all retail gasoline in the state for days or weeks. When the spot price is high, there is no incentive to report a trade. Robert McCullough, an economist who has studied energy markets for decades, testified before a state senate committee recently that at the height of the spikes last fall, the spot price of gasoline did not change for two weeks. If that had happened to the Dow, he wondered, wouldn’t someone have noticed?

The California Legislature, which is considering how to prevent future spikes in gasoline prices, should make spot market transactions public. Meanwhile, federal regulators already have the power to impose similar transparency on the natural gas market. Shedding a little light on prices could help Californians weather future winters.

Jamie Court is the president of Consumer Watchdog, a Los Angeles-based nonprofit organization.

You Might Also Like

Murdaugh family household items up for auction, including leather sofa and easy chair

Ed Sheeran breaks down in tears as he opens up about his wife Cherry Seaborn and his late friend Jamal Edwards

When is Ramadan 2023? Why do the dates change every year?

Poll: Is LA ready for the 2028 Olympics? Some neighbors express concern

Southern California Storm: How long will it rain and when will it finally dry out?

TAGGED: benefits, bills, Californias, dont, gas, high, Opinion, problem, Southern
Jacky March 13, 2023
Share this Article
Facebook Twitter Email Print
Share
Previous Article Flanked by his father, Simon Tadros, and karate teacher Andrew Nasr, the brave boy gave his first television interview two months after the traumatic helicopter crash. SeaWorld helicopter crash survivor Nicholas Tadros jokes about having his foot amputated
Next Article NCAA Tournament Sleeper Picks: Three Games With Intriguing Betting Odds NCAA Tournament Sleeper Picks: Three Games With Intriguing Betting Odds

Latest

Woman, 43, found dead in her Brooklyn apartment, strangled, body undiscovered for many weeks
Man, 37, shot to death in stairwell of Brooklyn NYCHA development
News
UK Govt, Health Unions Agree Pay Deal In Bid To End Strikes
UK Govt, Health Unions Agree Pay Deal In Bid To End Strikes
News
UK government and healthcare unions agree final pay offer
UK government and healthcare unions agree final pay offer
News
North Carolina bipartisan agreement to expand Medicaid clears state Senate
North Carolina bipartisan agreement to expand Medicaid clears state Senate
News
Electrosurgery Market
Electrosurgery Market
News
Not the time to skimp on investing in ‘future leaders’, Vista Group says
Not the time to skimp on investing in ‘future leaders’, Vista Group says
Gaming

nba 2k23 mt

© WhatsNew2Day News Network. All Rights Reserved. Email: contact@whatsnew2day.com

  • Home
  • Contact
  • About us
  • Privacy Policy

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?