The California Attorney General’s Office on Wednesday announced a $50 million settlement over allegations that two gasoline trading firms secretly worked together and manipulated prices on the spot market for gasoline in Southern California in 2015.

The agreement is scheduled to go before San Francisco Superior Court Judge Y.S. Cheng on Aug. 2 to be finalized.

Pending the judge’s approval, the settlement wraps up four years of litigation between the Attorney General, Dutch multinational energy and commodity trading company Vitol, Korea-based SK Energy Americas and SK’s trading arm.

During that time, more than 2 million documents were exchanged and some 50 depositions were submitted among the parties.

The dispute dates back to a lawsuit filed in May 2020, when the state accused Vitol and SK of taking advantage of market conditions after an explosion at a refinery in Torrance knocked off about 10 percent of the state’s gasoline supply. The lawsuit claimed the companies engaged “in a scheme to drive up gas prices for their own profit” by suppressing competition within the gas market, thus driving up prices for consumers.

The lawsuit accused Vitol and SK of trading small amounts of gasoline at high prices, with the intention of causing a spike in the prices of large volumes of gas sold in California’s fuel market.

Under the terms of the agreement, Vitol and SK will pay $12.5 million in civil penalties under California’s Unfair Competition Law and $37.5 million to the Attorney General’s office. Both companies no longer operate in the California gasoline trading market.

“Market manipulation and price gouging are illegal and unacceptable, particularly during times of crisis when people are most vulnerable,” Attorney General Rob Bonta said in a statement.

The Union-Tribune reached out to Vitol and SK to comment on the settlement but did not receive responses from either company by 5 p.m. Wednesday. In the agreement, there is no admission by Vitol or SK of legal wrongdoing.

The Attorney General’s Office said the inflated price of retail gas affected 10 counties in Southern California — including San Diego County — between Feb. 20 and Nov. 10, 2015. Under the settlement, customers who purchased gas during that period may file a claim to receive a portion of the $37.5 million paid by Vitol and SK.

According to the Attorney General’s Office, the $37.5 million is currently sitting in escrow and can be tapped when and if the judge OKs the agreement.

Once that is done, a process will be put in place to notify customers how to file claims and access their respective shares of the $37.5 million payout. According to the settlement, notifications will include sending postcards to households and posting a link where customers can fill out claims.

The $12.5 million in civil penalties will go to a fund that supports the Unfair Competition Law, which includes paying the legal fees associated with bringing the case against Vitol and SK.

Over the course of the lawsuit, one expert called by the Attorney General’s Office estimated the higher price in gasoline attributed to Vitol and SK in 2015 came to $127.8 million.

But the AG’s office said in the legal agreement that “a number of challenges and unsettled legal issues” could potentially reduce the monetary liability that Vitol and SK faced. The office cited the “difficulty of piecing together the actions of individuals nine years ago” and the “inherent risk of putting on a jury trial.”

Taking those factors into consideration, “the negotiated Settlement represents the best outcome for consumers,” the Attorney General’s Office said.

The high cost of gasoline has long been a hot political topic in California, most recently after drivers saw the average price of a gallon of regular soar past $6 during spikes in 2022 and 2023.

With the prodding of Gov. Gavin Newsom, the Legislature last year passed Senate Bill X1-2.

Hailed by the governor’s office as the “nation’s first price gouging law,” SB X1-2 created the Division of Petroleum Market Oversight to monitor the state’s crude oil and gasoline companies.

The division’s director issued a statement after Wednesday’s settlement was announced.

“When oil companies manipulate markets to line their own pockets, California will hold them accountable, and I commend my former colleagues in the Department of Justice on seeing this landmark case through to a successful conclusion,” Tai Milder said.

SB X1-2 requires refineries to report maintenance schedules in advance and provide daily reports on the market and imports. In addition, the legislation gives the California Energy Commission authority to penalize oil companies if they exceed a “maximum gross refining margin.”

The details of what will trigger the penalty — the first of its kind in the U.S. — and when it will be enforced are still being worked out.