Two years after California’s Democratic leaders declared victory over big oil with a law aiming to crack down on industry profits, the state has been unable to prove companies engage in price gouging when the cost of gasoline spikes in California. Since late 2022, Gov. Gavin Newsom has accused the oil industry of ripping off California drivers, pointing to an extreme price spike in the state compared to the rest of the country – while companies reported record profits.
Former California State Senator Nancy Skinner’s bill, SBX1-2, along with a previous 2022 law, require refineries to submit monthly reports about their sales, profit margins and other information. Within 45 days, the CEC is required to publish the information, which breaks down the average per-barrel profit earned each month by three different refiners, which are kept anonymous to protect company information. But the CEC has not updated figures showing net margins – or total profit earned or lost when a refinery includes operational costs – since April 2024. It has posted figures showing refiners’ average gross margins, which are the wholesale price of gasoline minus the price of crude oil.
Several months of available data show that two refiners had five consecutive months of negative margins, with losses ranging between nine and 44 cents per gallon between October 2023 and February 2024. Catherine Reheis-Boyd, president of the Western States Petroleum Association, said the state bears blame for high gas prices, noting state and local taxes, along with costs for environmental programs add up to roughly $1.30 per gallon. “If we’re going to talk about the price of the pump, let’s talk about what goes into it because $1.30 of it ain’t us,” she said.
California gas prices are typically higher than around the rest of the country due to a combination of high taxes and stricter environmental standards. The state also relies on its own in-state refiners for gasoline so when there are supply disruptions like unplanned maintenance, they affect prices more acutely.
Since then companies like Phillips 66 have announced plans to shut down their refinery operations in California, in 2025, which will constrict supply even more
The California Air Resources Board is also trying to put though an additional 50-65 cents a gallon tax which is supposed to start in July of this year although even the Democratic legislature is pushing back
Its not the oil companies, its the state government lead by Gavin Newsom that are forcing gas prices up
Time California Government just admitted it
Right Gavin? @GavinNewsom
Time for a full stop on trying to regulate the free market