Isn’t there a rule that you can’t have a suspicious run-up in gasoline prices until after the federal government investigates warnings by a U.S. senator of “malicious trading schemes in the California gasoline market” during the previous gasoline price spike?

Apparently not.

Four months after record-high gasoline prices—widely blamed on a perfect storm of events—elicited a call by California Senator Dianne Feinstein for an investigation by the Federal Trade Commission (FTC), prices in Southern California are setting new speed records.

“Prices have now gone up even more than they did during the spike in October and the one last February, and more quickly than they did during any one-month stretch in 2008, when we had another big spike,” according to Jeffrey Spring of the Automobile Club.

Prices haven’t reached that October level yet, but they are headed there fast. The average price in Southern California has gone up nearly 60 cents since last month. A gallon of gas is $4.317 in the Los Angeles-Long Beach area, up 11.3 cents since a week ago. San Diego is $4.210.  

Northern California probably isn’t far behind. Among the host of reasons cited for the spike is the switch California refineries make to more expensive summer blends. Southern California reportedly is ahead of the North.

Analysts also cite unusually high refinery maintenance. At some point the price of oil, unusual weather patterns, natural disasters, infrastructure breakdowns, retailer fears, buyer panics and market idiosyncrasies will all get their due.

Meanwhile, the Los Angeles Times reports that “big-money investment speculation, from hedge fund and commodity pools, has also soared in recent months, based on bets that the price of oil and gasoline would rise.”

After Senator Feinstein and other California lawmakers complained to the FTC last October, the agency promised to look into allegations of market manipulation, and “remain vigilant.” It described no specific actions it would take, and didn’t take any.

–Ken Broder

To Learn More:

California Gasoline Gains on March Trading, Low Supply (by Eliot Caroom, Bloomberg)

Southern California Sees Record One-Month Rise in Gasoline Prices (by Ronald D. White, Los Angeles Times)

Southern California Gas Prices Spike Nearly 60 Cents in Past Month (by Ed Joyce, KPCC)

Crude Stocks Swell to Levels Not Seen Since Last Summer, Gasoline Inventories Drop (by Patrick DeHaan, GasBuddy)

Feinstein Wants Probe of Soaring Gas Prices, “Malicious Trading Schemes” (by Ken Broder, AllGov California)