California has reached a $50 million settlement agreement with three oil traders accused in 2015 of price-fixing gasoline prices.
California Attorney General Rob Bonta announced that the settlement involves Vitol, Inc., SK Energy Americas, Inc., and its parent company SK Trading International. The lawsuit filed in May 2020 accused the three companies of market manipulation and anti-competitive behavior following an explosion at the Torrance refinery in February 2015, leading to soaring oil prices for California consumers.
“Oil companies should not be able to siphon massive profits from hard-working Californians’ pockets through illegal market manipulation,” Bonta said in a press release on July 10. “Market manipulation and price-fixing are illegal and unacceptable, especially during times of people’s most vulnerable crises.”
Vitol and SK Energy Americas have since exited the California market. According to the settlement agreement, the two companies have agreed that if they re-enter the market, they will follow California’s new daily and weekly reporting requirements. The daily reports require the disclosure of every transaction that occurred the previous day, while the weekly reports mandate reporting of gasoline inventory records.
California also requires these companies to provide copies of all contracts or agreements signed with entities involved in oil product trading (including refineries, oil producers, oil product transporters, marketers, pipeline operators, end users, etc.).
Last year, California established the Division of Petroleum Market Oversight to “combat oil giants” by collecting reports and data from the state’s petroleum industry. The California Energy Commission has also been authorized to limit oil company profits and penalize those companies deemed to have exceeded the state’s specified oil industry profit margins.
Tai Milder, Director of the Division of Petroleum Market Oversight, stated in a press release, “When oil companies manipulate the market for their own profit, California will hold them accountable.”
This settlement between California and the three oil trading companies is separate from the private class-action lawsuits filed against these companies in federal court.
Vitol, Inc., SK Energy Americas, Inc., and SK Trading International have not responded to requests for comment.