California Settles Lawsuit Against Oil Companies for $50 Million

Gasoline prices are displayed at the Union 76 station in Beverly Hills, Calif., on Aug. 28, 2023. (Mario Tama/Getty Images)

California reached a $50 million settlement with three oil market trading companies targeted by the state for allegedly running up gas prices in 2015.

The settlement, announced by Attorney General Rob Bonta, involved Vitol, Inc., SK Energy Americas, Inc., and its parent company SK Trading International (SK).

Mr. Bonta sued the companies in May 2020 alleging they manipulated the market after a Torrance refinery exploded in February 2015, suppressing competition and driving up gasoline prices for consumers in the state.

“Petroleum companies should not get to reap mass profits out of the pockets of hard-working Californians through illegal market manipulation,” Mr. Bonta said in a press release July 10.

“Market manipulation and price gouging are illegal and unacceptable, particularly during times of crisis when people are most vulnerable.”

Vitol and SK Energy Americas no longer operate in the California market. In the settlement, the companies agreed to new daily and weekly reporting requirements if they decide to reenter the market.

Daily reports would be required for each transaction that occurs the preceding day. Weekly reports would include gasoline inventory records.

The state is also requiring that the companies provide copies of all contracts or agreements entered into with any refiners, oil producers, petroleum product transporters, marketers, pipeline operators, or terminal operators, or any other entity that trades in petroleum products.

California passed a law last year to “take on Big Oil” by creating a new government agency—the Division of Petroleum Market Oversight—to collect reports and data from the state’s oil industry.

The state Energy Commission was also given the authority to cap profits and penalize companies they believe are exceeding the state’s allowable profit margins for the oil industry.

“When oil companies manipulate markets to line their own pockets, California will hold them accountable,,” said Tai Milder, director of the new Division of Petroleum Market Oversight, in the press release.

The settlement is separate from a private class action lawsuit filed against the companies in federal court.

Vitol, Inc., SK Energy Americas, Inc., and SK Trading International did not return requests for comment.