Calif. to investigate whether gas stations are fixing prices

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SACRAMENTO, Calif. -- Gov. Gavin Newsom has asked the state attorney general to look into whether California's oil and gas suppliers are using unfair practices to maintain the state's surging gas prices.

In a letter to State Attorney General Xavier Becerra Monday, the governor urged an investigation into retailers that may be "misleading and overcharging customers."

Newsom cited a study from the California Energy Commission, which he asked to look into why Californians pay a premium at the pump. The governor says the study found that name-brand gas retailers in the state -- such as Chevron, Shell, Exxon or Mobil -- charge more than unbranded gas-marts, despite no "evidence that gasoline sold by less expensive, unbranded outlets is in any way inferior."

“While this practice is not necessarily illegal, it may be an effort of a segment of the market to artificially inflate prices to the detriment of California consumers and could account for at least part of the price differential,” the commision wrote in a memo after their study.

“Consumers may be purchasing higher-priced gasoline brands for convenience, credit card acceptance, or other reasons. However, if competitors decide collectively to fix prices, this may be unlawful.”

Referring to the increased prices as a "mystery surcharge," Newsom suggested that name-brands may even be collaborating to fix their prices or engaging in "other anti-competitive practices" to artificially keep prices high.

"If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public," Newsom wrote.

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