Price disparities in the gasoline market have caught the attention of regulators and politicians, particularly here in California, where gas prices have been 20 cents above the national average and more gas is burned daily than in China, Germany or Russia. The Federal Trade Commission began an investigation in 1998 into California's gasoline prices. California Attorney General Bill Lockyer says he's contemplating a lawsuit against oil refiners, whose profits have more than doubled the past two years. That follows the task force report he commissioned that found reduced refinery competition in the state. No one has come forward with the smoking gun,'' he says.
Oil companies are under fire for charging some dealers more than others for the gas they sell.
Critics say that practice results from the hundreds of wholesale-pricing zones that the oil companies have created around the country. While oil companies keep the boundaries of those zones under wraps, some are reportedly as big as a town and some as small as a single station. Maryland dealer Martins says a Shell representative told him that there were more than 400 pricing zones in the state. Oil companies sell their gas to dealers at different prices because they know some stations have better locations where consumers are willing to pay more. The pricing system, Oyster says, is unfair.