As oil companies continue to evade questions about unexplained gas price increases, Gov. Gavin Newsom convened a special session of the California Legislature on Dec. 5 to discuss a price gouging penalty on oil companies that will keep money in Californians’ pockets.
The governor’s action comes on the heels of a state hearing yesterday—which five major oil refiners refused to attend—to investigate this fall’s unprecedented spike in gasoline prices. This spike in gasoline prices resulted in record refiner profits of $63 billion in just 90 days, disproportionately affecting low- and middle-income families.
“Big oil is ripping Californians off, and the deafening silence from the industry yesterday is the latest proof that a price gouging penalty is needed to hold them accountable for profiteering at the expense of California families,” said Newsom. “I’m calling a special session of the Legislature to do just that, and to increase transparency on pricing and protect Californians from outrageous price spikes in the future.”
This fall’s spike occurred while crude oil prices dropped, state taxes and fees remained unchanged and gas prices did not increase outside the western U.S., so the high prices went straight to the industry’s bottom line.
During the special session, the Legislature also considered efforts to empower state agencies to more closely review gas costs, profits and pricing as well provide the state with greater regulatory oversight of the refining, distribution and retailing segments of the gasoline market in California.
Taking action to lower prices at the pump, Newsom in September ordered the switch to winter-blend gasoline and demanded accountability from oil companies and refiners that do business in California. Since California’s record-high gas prices of $6.42, the governor’s actions have reduced those prices to $4.95 most recently – a decrease of $1.47 since the peak.
In the third quarter of 2022, from July to September, oil companies reported record high profits:
• Phillips 66 profits jumped to $5.4 billion, a 1243% increase over last year’s $402 million;
• BP posted $8.2 billion in profits, its second-highest on record, with $2.5 billion going toward share buybacks that benefit Wall Street investors;
• Marathon Petroleum profits rose to $4.48 billion, a 545% increase over last year’s $694 million;
• Valero’s $2.82 billion in profits that were 500% higher than the year before;
• PBF Energy’s $1.06 billion that was 1700% higher than the year before;
• Shell reported a $9.45 billion haul that sent $4 billion to shareholders for stock buybacks;
• Exxon reported their highest-ever $19.7 billion in profits;
• Chevron reported $11.2 billion in profits, their second-highest quarterly profit ever.