SK Energy, Vitol Manipulation of Gas Prices California Class Action

According to the complaint for this class action, a gasoline refinery explosion in Torrance, California, and the market disruption it caused, provided an opportunity for collusion scheme and higher prices in the gasoline market. The complaint alleges that various types of anticompetitive behavior resulted in higher prices for regular and premium gasoline in California, causing economic harm. The case has been brought under California laws against Vitol, Inc. SK Energy Americans, Inc., SK Trading International Co. Ltd., and two individuals.

The class for this action is all persons or entities who bought gasoline from a retailer in California from at least February 18, 2015 through December 31, 2016.

The gasoline refinery in Torrance supplied about ten percent of all gasoline in California and about twenty percent of all gasoline in the southern part of the state.

The explosion occurred in 2015. The complaint says, “A key part of the refinery complex was severely damaged, resulting in an unanticipated undersupply of refined gasoline in California and eliminating the refinery’s ability to refine alkylates blended with the gasoline.

Disruptions like the Torrance explosion can cause severe shortages in California. Because of California’s strict emissions standards, the complaint says, “market participants typically must obtain gasoline for California from foreign sources, usually, Asia, which can take several weeks to make its way to California.” The explosion caused the refinery to shut down for a period of time and then to operate at limited capacity for more than a year.

The complaint alleges that the anticompetitive behavior may have begun around October or November 2014, with agreements “to coordinate or cooperate regarding trading activities on the West Coast” of the US. However, the explosion gave the companies an extra opportunity to inflate prices for gasoline traded on the wholesale spot markets and also raise the price of alkylates, without attracting the attention of regulators.

During this time, the complaint says they “reached agreements with one another, and other third parties, as part of a conspiracy to raise, fix, and tamper with the price of finished gasoline in California by using various tactics.”

To begin with, Vitol and SK negotiated large contracts to supply both gas and blending ingredients for California. The lead traders for the two companies were friends and former colleagues, facilitating the scheme.

The complaint claims the companies conspired to raise the spot market price to gain greater profits on their contracts. The complaint also alleges that they “selectively report[ed] trades to certain benchmarking services” which also contributed to increase gas prices “to levels that would not have existed in a competitive market.”

The prices increases have been under investigation since 2019. In May 2020, the state’s attorney general filed a lawsuit against the defendants in this case.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

SK Energy, Vitol Manipulation of Gas Prices California Complaint

July 21, 2020

According to the complaint for this class action, a gasoline refinery explosion in Torrance, California, and the market disruption it caused, provided an opportunity for collusion scheme and higher prices in the gasoline market. The complaint alleges that various types of anticompetitive behavior resulted in higher prices for regular and premium gasoline in California, causing economic harm. The case has been brought under California laws against Vitol, Inc. SK Energy Americans, Inc., SK Trading International Co. Ltd., and two individuals.

SK Energy, Vitol Manipulation of Gas Prices California Complaint

Case Event History

SK Energy, Vitol Manipulation of Gas Prices California Complaint

July 21, 2020

According to the complaint for this class action, a gasoline refinery explosion in Torrance, California, and the market disruption it caused, provided an opportunity for collusion scheme and higher prices in the gasoline market. The complaint alleges that various types of anticompetitive behavior resulted in higher prices for regular and premium gasoline in California, causing economic harm. The case has been brought under California laws against Vitol, Inc. SK Energy Americans, Inc., SK Trading International Co. Ltd., and two individuals.

SK Energy, Vitol Manipulation of Gas Prices California Complaint
Tags: Antitrust, Collusion and Price Fixing, Energy, Price Manipulation