Skepticism over bills to cut gas prices

Gas prices at California pumps teetered at near-record highs again Monday, as politicians at the state Capitol scrambled to scrutinize oil company practices and profits.

Lawmakers -- especially at election time -- have railed for years about the budget-busting cost of gassing up cars and trucks. Although they have had little success, they keep trying.

Downtown Los Angeles diamond dealer Samir Shahrestan was skeptical but sympathetic to the Legislature’s efforts.

“The oil companies are a lot bigger and more powerful than they are. They affect politics at a much higher level than our Legislature,” Shahrestan said as he pumped more than $40 of gasoline into his Jaguar sedan.

Assembly Speaker Fabian Nunez (D-Los Angeles) and three of his Democratic colleagues last week announced that they were sponsoring bills to broaden oversight of California refiners that supply more than 90% of the state’s gasoline.

Nunez said his gut told him that the steep prices were at least partially caused by oil companies gaming the market, reaping big profits by forcing refinery outages. But he conceded that neither he nor other state and federal officials had found any evidence.

“I can’t prove it today,” Nunez said. “We just have to dig deeper.”

The new legislative proposals would force oil companies to provide more data about production, inventories and imports, so regulators could analyze whether gasoline price hikes were based on economics and not gouging.

Assemblymen Mike Davis (D-Los Angeles), Mike Eng (D-Monterey Park) and Mike Feuer (D-Los Angeles) also are seeking advance word on maintenance closures at oil refineries and their potential to affect retail prices.

A third part of the legislative package calls for a study of so-called hot gas, which expands at warmer temperatures giving drivers less energy per gallon.

The oil industry and some market analysts dismiss the raft of bills as predictable grandstanding. They note that swift passage isn’t likely to bring motorists relief anytime soon.

The Energy Department’s weekly survey of filling stations around the nation showed California’s average gasoline price falling 1.4 cents to $3.436 for a gallon of self-serve regular, still 11.3 cents above the year-earlier price.

But the national average jumped 11.5 cents to $3.218 a gallon, which was 32.6 cents ahead of the same week in 2006. The sharp rise was driven by big increases in the Midwest, East Coast and Gulf Coast.

The current average is closing in on the all-time inflation-adjusted record set in March 1981. The average price at the time was $1.417 a gallon, which translates to $3.292 in May 2007 dollars, said Doug MacIntyre, a senior oil market analyst with the U.S. Energy Information Administration.

Many California motorists say they’re suffering from bigger gas bills and share Nunez’s suspicions about market trickery. Nevertheless, they remain skeptical that the Legislature can do anything to force prices down.

“I think they will mostly just sit there and talk. I don’t see them making much of an impact,” said Nazish Chunara, an 18-year-old merchandising and marketing student at the Fashion Institute of Design & Merchandising in downtown Los Angeles. “The oil companies just aren’t giving anyone the whole story.”

Oil executives and industry analysts insist that current high prices are caused by the interplay of supply and demand, not fiddling with refinery production or secret deals in corporate suites.

California’s 14 gasoline-making refineries produce as much fuel as they can, and yet the state still imports about 3.5 million barrels a day to satisfy daily consumption of 44 million barrels, said Joe Sparano, president of the Western States Petroleum Assn., a Sacramento-based trade organization.

Sparano said he understood that Nunez and other lawmakers were trying to deal with constituents’ frustration over high gas prices. But he noted that recent studies by the California Energy Commission and the Federal Trade Commission uncovered “no market manipulation and no anti-competitive activities.”

If politicians truly wanted to bring down gas prices in California, they shouldn’t spend their time looking for scapegoats in the oil industry, said Tom Kloza, a market analyst with the independent Oil Price Information Service in Wall, N.J.

“Prices would drop significantly in a tight market like California if every motorist cut gasoline consumption by just 4 ounces by driving 4,000 yards less each day,” he said.

“Driving less is the answer. Everything else is a bit of nonsense at this point,” Kloza said.

marc.lifsher@latimes.com

ron.white@latimes.com