Santa Monica, CA — California has broken all records for the biggest gap between what consumers here have paid so far versus the rest of the nation for gas at the pump, Consumer Watchdog said today. Californians paid $1.2 billion more, after tax differentials, than the rest of the nation in the month of July, a record, and $4.8 billion more for their gasoline over the last six months ending July 31st, since gas price spikes started. That amounts to $201 extra paid by each California driver.
Analysis of state data found that oil refiners were able to triple refiner margins the second week of July to a record $1.61 a gallon, representing the amount of money refiners receive for each gallon sold at the pump. The historical margin over the last fifteen years is 48 cents. The margin since the price spike began in February has averaged $1.05 per gallon.
“Oil refiners are getting rich off Californians pain at the pump and its time they pay a price for their profiteering at Californians expense,” said Jamie Court, president of Consumer Watchdog. “We need new laws to stop the California gouging and we are very grateful that Tom Steyer is stepping up to flex his muscle to help secure new standards to protect Californians’ wallets.”
Consumer Watchdog today released an analysis of oil refiner profits, including 2nd quarter profits reports, called “Golden State Gouge: Summer of Refining Profits” that can be read at: www.consumerwatchdog.org/resources/thegoldenstategouge.pdf
The report also found:
• In the 2nd quarter of 2015, Chevron, the state’s largest refiner, made $731 Million in profit on their refining. This was an increase of $214 Million, or 41% over the same quarter last year. It is almost double their average quarterly profits since 2005 and 54% of its refining is in California.
• Valero’s California profits were 11 times higher in the second quarter of 2015 than the same quarter in 2014. The company made $294 Million, up from $24 Million.
• Valero’s California profits per barrel increased by more than 10 times their prior year, from $0.99 to $11.23. Valero has averaged $100 million in profit per quarter over the last ten years. During seven quarters with spiking gas prices, the refiner averaged $220 million per quarter – an increase of 120%.
• Speaking to investors, Chevron’s Frank Mount, general manager of investor relations, admitted, “Tight product supply, primarily on the West Coast, boosted refining and marketing margins and increased earnings by $165 million between quarters.”
• Valero executive George K. Simmons told shareholders and analysts that continued refining profits are predicated on making more money by selling less gasoline going forward. “Some of these refinery outages that we've been seeing, will they continue or not will really determine how strong the West Coast market will be,” he said.
Tesoro, California’s second largest refiner, is set to reveal its quarterly report at the close of the New York Stock Exchange Wednesday. Consumer Watchdog said the company is likely to follow Valero’s pattern of abnormally high profits from their California refining operations. In the first quarter, the company increased its California per barrel profits by $3.14, despite a major labor dispute. Since its refineries ran more efficiently in the second quarter, Tesoro will likely see a profit leap much like Valero’s.
– 30 –
