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Published Saturday, April 1, 2000, in the San Jose Mercury News

Lockyer offers no relief from rising gas prices

  • The real problem: State taxes have little effect, but too little competition allows producers to jack up prices, attorney general says. Mercury News Staff and Wire Reports 

  • LOS ANGELES -- Attorney General Bill Lockyer said Friday there is nothing he can do to bring down the price of gas right now.

     ``No, I'm not king,'' he said before his task force on gas pricing held its last meeting.

    He could file a lawsuit against producers, he said, but that is not a short-term solution.

     ``If someone walked in with a videotape of a secret meeting to set prices or a whistle-blower showed up to admit that they had done that privately, I'd go after them criminally,'' he said, ``but that hasn't happened, and I don't expect that to occur.

     ``What we need to do is figure out how to not have this happen year after year after year.''

     As the summer vacation season looms, the price of gas has become the biggest political issue in the state capital.

     On Thursday, some 500 cars and sport utility vehicles drove around the Capitol, settling on the lawn in front of the building's steps to jeer lawmakers. Some called Gov. Gray Davis a communist for not dropping the state tax on gas. 

    Whipped into a frenzy by radio talk show hosts and advocacy groups, protesters were joined Thursday by Assembly Republicans. Assembly Republican leader Scott Baugh of Huntington Beach, was carrying a 6-foot-tall cardboard gas pump that read: ``California held hostage at the pump: Day 15.''

     Since mid-March, when the state's retail gas prices averaged $1.74, or 19 cents above the national average, drivers have been outraged.

     But Lockyer said Friday that state taxes and requirements for cleaner-burning fuel play only a small role in the state's gas prices. The real problem, he said, is too little competition -- which allows producers to jack up the prices.

     The historic trend of refinery margins is 25 cents a gallon, he said. Last year it was 40 cents, and so far this year it's 66 cents a gallon.

     ``That has nothing to do with the world price of oil,'' he said. ``That's their costs of operating and their profit-taking.''

     Californians paid an extra $1.3 billion for gas from January to August 1999, according to an attorney general's report in November. And prices in San Francisco were 24 cents higher than the national average.

     Legislation is possible, Lockyer has said. State lawmakers from both parties have proposed several different tax-cutting plans, but no action has been taken.

     There's not much else you can do to increase competition, Lockyer said: ``It's very hard for a state government to affect international markets of this sort.''

     The legislative task force, representing the oil industry, service stations, truckers and consumer and environmental groups, started meeting in January. It will issue a report in May that will be submitted to the state Legislature.

    Dion Nissenbaum of the Mercury News Sacramento Bureau contributed to this report. You may contact him at dnissenbaum at or (916) 441-4603.

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