SACRAMENTO, Calif. - A Chevron memo is raising suspicion that oil executives intentionally reduced refining capacity in an effort to boost profits. The 1995 memo, obtained by Consumers Union, reads:
"If the U.S. petroleum industry doesn't reduce it's refining capacity, it will never see any substantial increase in refinery profits."
In the last 20 years, 18 of California's 32 refineries have shut down. The industry is now seeing record prices and profits at the pump.
On Friday, former oil and gas executive Joe Sparano spoke with KCRA 3 and made no apologies for continued rise in gas prices. In fact, he explained that prices are a direct result of driver demand far exceeding gas supply.
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When asked when prices would come down and by how much, Sparano said he didn't know.
Sparano openly acknowledged that he is answering questions as part of a public relations campaign to educate and explain the high price of gas.
He also stressed that he is telling the truth when he said that oil companies are simply charging the price the market will pay and is not ruling out the possibility that gas could someday drop below $2 a gallon again.
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