Legislators Seek Inquiry Into Gasoline Price Increases

By GARY GORMAN

Aug. 8, 1990 12 AM PT

TIMES STAFF WRITER

Double-digit increases in the price of gasoline at Ventura County pumps angered consumers Tuesday and prompted a Republican congressman and a Democratic state senator to call for investigations.

“We do not have an oil shortage at this point; therefore, these price hikes . . . are unwarranted,” said Rep. Robert J. Lagomarsino (R-Ventura), who called for a federal investigation of possible antitrust and price-fixing violations by oil companies.

State Sen. Gary K. Hart (D-Santa Barbara) made a similar appeal for a federal and state investigation.

Hart and Lagomarsino said they do not think the oil supply crisis, prompted by Iraq’s invasion of Kuwait on Thursday, is serious enough to warrant changing the federal government’s ban on offshore oil development along the California coast. Without such a policy change, oil officials said, the crisis will not provide much of a boon for Ventura County oil producers.

The county’s gasoline retailers, however, have been busy raising prices. Self-serve, unleaded regular was selling for $1.29 a gallon at Chevron stations in Moorpark and Camarillo on Tuesday, an 8-cent increase since the invasion.

In the same period, prices have gone up 6 1/2 cents a gallon at an Exxon station in Ventura and 5 cents a gallon at a Mobil station in Thousand Oaks and at a Unocal station in Fillmore.

Combined with a 5-cent-a-gallon increase in the state gasoline tax that took effect last Wednesday, gasoline prices have risen more than 10% at some stations in less than a week. Several station operators said they expect more increases in the coming weeks, noting that the price of crude oil has reached the highest level in nearly five years.

“These scumbag oil companies remind me of looters after a disaster,” said Donald Ricky, a contractor who was filling up at a Shell station in Ventura. The price of gasoline there went up 4 cents Sunday and 2 cents more Tuesday afternoon.

“It’s the same thing they did in ’73 and ‘79,” Ricky said, recalling previous oil crises. “They immediately leap at the first opportunity to gouge the consumer. I resent it like hell.”

Ricky said he has no choice but to pay the higher prices because he needs his truck for business. “I remodel houses,” he said. “I can’t ride the bus with a 2-by-4.”

But a Shell spokesman in Houston said the higher prices are justified.

“Oil is a commodity. It’s no different from oranges, soybeans or coffee,” spokesman H.F. Hutchins said. “This is the way world commodities operate. They react to what’s going on with the supply situation on an immediate basis.

“It’s not much different from what you see when there’s an orange crop freeze in Florida or a coffee crop freeze in Costa Rica. Prices rise almost immediately in response to those events.”

Hutchins said a $3-per-barrel increase on July 27 by the oil-producing countries started the surge in prices. “The combination of that plus dramatic events in the Middle East have added a psychology of shortage and uncertainty in the market. The prices reflect that uncertainty in supply.”

Not everyone buying gas on Tuesday was upset about the price increases. “I can see the oil companies’ point of view,” said Mike Murray of Ventura. “They feel there will be a shortage and they can make profits now. I’m not opposed to that.”

But Lagomarsino, echoing charges by other congressmen, accused some oil companies of “taking advantage of the crisis in the gulf to make a huge profit off the public.” He called for U.S. Atty. Gen. Dick Thornburgh to investigate “possible antitrust and price-fixing violations.”

In a joint statement Monday, the Justice, Energy and Transportation departments said they would monitor oil prices and vigorously prosecute any companies guilty of antitrust violations.

After attending a meeting of the state Senate Energy Committee on Tuesday, Hart said the state and federal governments should “redouble our efforts at antitrust enforcement.”

“I think whenever you are in a situation like this there’s an easy justification to raise prices.”

Hart said he disputed figures presented to the committee by Richard A. Bilas, a member of the California Energy Commission. Bilas told the panel that gasoline prices had gone up by only 2.4 cents on the average since the invasion. “That seemed awfully low, based on personal experience and what constituents say,” Hart said.

Hart, who has opposed offshore oil drilling, said that at this point he does not expect a change in the federal policy banning lease sales until 1996 along the Santa Barbara Channel and until the year 2000 along the rest of the state’s coastline.

“It depends how much worse it gets,” Hart said. “Those of us who oppose it off the Santa Barbara Channel would say there’s much more to be gained from energy conservation. We just don’t have a national energy policy.”

Lagomarsino aide John Doherty said the congressman believes that all parts of the state should be treated equally. Lagomarsino has supported offshore drilling and was politically embarrassed in June when the Bush Administration banned it for the entire decade off most of the California coast but only until 1996 in the waters off Lagomarsino’s district.

Oil company officials said that unless the crisis leads to more oil development off the Southern California coast, it would not provide much of a boost for the local oil industry.

“I don’t see a whole lot of change in Ventura County per se,” said Fred Sarrafian, a Texaco official in Ventura. The company pumps about 9,000 barrels a day in the county, mostly from around the Ventura River bed.

“There could be a substantial change if things result in more offshore oil activity,” he said.