California has reached a $50 million settlement agreement with three oil traders accused of price-fixing gasoline in 2015.
California Attorney General Rob Bonta announced that the settlement involves Vitol, Inc., SK Energy Americas, Inc., and its parent company, SK Trading International. A lawsuit filed in May 2020 alleged that the three companies manipulated the market and stifled competition following an explosion at the Torrance refinery in February 2015, leading to a surge in oil prices for California consumers.
“The oil companies should not be able to exploit hardworking Californians through illegal market manipulation,” Bonta said in a press release on July 10. “Market manipulation and price-fixing are illegal and unacceptable behaviors, especially during times of greatest need for people.”
Both Vitol and SK Energy Americas have since exited the California market. As part of the settlement agreement, both companies have agreed that if they were to re-enter the market, they would comply with California’s new daily and weekly reporting requirements. The daily reporting mandate requires reporting each transaction from the previous day, while the weekly reporting entails reporting gasoline inventory records every week.
California also demanded that these companies provide copies of all contracts or agreements they have signed with entities involved in oil product trading, including refineries, oil producers, product transporters, marketers, pipeline operators, terminal operators, and more.
Last year, California established the Division of Petroleum Market Oversight through new legislation to “combat oil giants,” responsible for collecting reports and data from the state’s petroleum industry. The California Energy Commission was also authorized to limit oil company profits and penalize those companies deemed to exceed the state’s regulated oil industry profit margins.
Director of the Division of Petroleum Market Oversight, Tai Milder, stated in a press release, “When oil companies manipulate the market for their own gains, California will hold them accountable.”
This settlement between California and the three oil trading companies is separate from the private collective lawsuit brought against them in federal court.
Vitol, Inc., SK Energy Americas, Inc., and SK Trading International did not respond to requests for comment.