Sacramento, CA – As the California Energy Commission (CEC) proposed a list of oil refinery strategies to Governor Newsom, including key regulatory rollbacks, 51 public interest and environmental groups are urging the state to stand strong on refinery accountability and consumer protection in a letter to Governor Newsom, Senate Pro Tem Mike McGuire and Assembly Speaker Robert Rivas.
Among the rollbacks proposed are a pause on developing the price gouging penalty rule enacted by the legislature in 2023 and increased oil well permitting in Kern County.
The groups pointed to new state data showing oil refiners making a killing off California consumers – with a combined gross refining margin and distribution margin of $1.71 in April, twice the national and historical averages.
“California oil refiners do not need a bailout. New data posted by the California Energy Commission shows oil refiners made a retail gross refining profit margin of $1.02 per gallon in April,” the groups wrote in the letter. “In addition, the data shows that the distribution margin, which includes the Mystery Gasoline Surcharge, was .69 cents per gallon in April. Combined these extraordinary profit and overhead costs add more to a gallon of gasoline than the cost of crude oil, as CEC created graphic below shows.”
“California’s oil refining and distribution sector are charging Californians more than double what they take in elsewhere. It would be perverse to give this industry more subsidies.”
The groups include:
Alliance of Nurses for Healthy Environments
Biofuelwatch
California Nurses for Environmental Health and Justice
Center for Biological Diversity
Center for Environmental Health
CERBAT
Clean Water Action
Climate Hawks Vote
Climate Health Now
Climate Reality Project Orange County Chapter
Climate Reality Project, San Fernando Valley Chapter
Consumer Watchdog
ContraCosta MoveOn
Courage California
Elected Officials to Protect America
Climate Justice Action, First UU of SD
Food & Water Watch
Friends Committee on Legislation of California
Glendale Environmental Coalition
Greenpeace
Indivisible Marin
Local Clean Energy Alliance
Long Beach Alliance for Clean Energy
Ocean Conservations Research
Oil and Gas Action Network
Pacifica Climate Committee
Pelican Media
PowerCA Action
Resource Renewal Institute
Rise Economy
Rodeo Citizens Association
RootsAction
San Francisco Bay Physicians for Social Responsibility
SanDiego350
Santa Cruz Climate Action Network
SEE (Social Eco Education)
Sierra Club California
Sunflower Alliance
Sustainable Mill
The Climate Reality Project San Diego
Transition Sebastopol
Voting 4 Climate & Health
West Berkeley Alliance for Clean Air and Safe Jobs
Working Families Party
350 Bay Area Action
350 Humboldt
350 Sacramento
350 Santa Barbara
“We urge you, instead, to insist that the Administration finish the job it started and that the legislature directed it to do in special sessions in 2023 and 2024: propound rules for a price gouging penalty, finalize and enforce the ABX2-1 re-supply inventory rule and begin the minimum inventory rule-making. In addition, we call on you to reject rollbacks to refinery process safety management (PSM) rules which protect refinery workers and communities while preventing sudden outages that trigger price shocks.”
The gross margins are what the refiners keep after the cost of crude oil, environmental fees, and taxes are deducted. The only refiner cost included in the gross margin is the operating costs for the refinery, which are reported by the refiners to the SEC at about 20 cents per gallon.
