Report Highlights Overly High Gas Prices In California

Published on

Southland motorists are used to getting gouged at the pump.

But a new report from Consumer Watchdog reveals that since the state’s record gasoline price spike began in February, Californians have paid $4.8 billion more than the rest of the nation for regular gasoline.

That figure comes from a Consumer Watchdog analysis of state and federal data, which deducts California’s slightly higher taxes.

“People have to make choices between filling up their tank and paying the mortgage,” said Jamie Court, president of the Santa Monica-based organization. “There has never been this type of gouging in this state before and it’s got to stop.”

The organization unveiled its report Wednesday in a news conference at its offices. They were joined by Tom Steyer, founder of NextGen Climate, an organization that seeks to prevent climate disaster and preserve American prosperity.

“The oil refiners are raking in historic profits,” Steyer said. “They’re shipping gasoline from California to foreign countries while there’s a shortage here at home. That’s good old-fashioned highway robbery.”

Steyer is calling on the state Legislature to address the problem. He is proposing a measure that would force oil companies to be more honest and transparent about the reasons behind gas price spikes. Specifically, the legislation would:

•Require oil companies to fully disclose the profits they make from refining gasoline in California and the amount of taxes they pay to the state.

•Require oil refiners in California to give the public advance notice of planned maintenance and outages at their oil refineries.

•Require oil companies to have a plan to maintain a minimum level of gasoline reserves in order to prevent price spikes.

•Increase the legal and financial penalties for oil companies if they illegally conspire to increase gas prices.

The California Energy Commission also notes that refiner margins — the amount of money refiners collect for each gallon of gasoline — set a record for California in July. The margin for the week of July 13 stood at $1.61 for branded stations. Before 2015, the margin had never exceeded $1.30 per gallon, and the average amount they have received per gallon since 1999 has been 48 cents.

Valero’s California operations generated a profit of $294 million during the second quarter of 2015 — 11 times more than the same period a year earlier. Chevron also saw a massive uptick. Its second-quarter U.S. refining profits topped out at $731 million. That was up $214 million, or 41 percent, over the same quarter last year, and nearly double the company’s average quarterly profits since 2005.

Chevron doesn’t break out its California profits, but 54 percent of the company’s refining takes place within the Golden State. Chevron is California’s biggest refiner, accounting for 28 percent of the state’s refining capacity.

Braden Reddall, a media advisor for Chevron Corp., said refining margins fluctuate based on a variety of industry-wide supply and demand issues. And company-wide profits for the second quarter, he said, were down 90 percent.

“So it is clearly misleading to focus on one part of the results from one part of the business from just one quarter,” Reddall said via email. “It is true that supply in California has been squeezed this year due to a fire at one refinery and a strike at another. But year-round, the state’s Air Resources Board maintains a regulatory regime that is dramatically different from the rest of the United States, while California also has the second-highest taxes on gasoline in the country. These factors have a lot to do with why prices in California are different.”

Reddall further noted that the vast majority of Chevron and Texaco stations are independently owned and operated, and they set their own prices based on a variety of factors.

Valero declined to comment on its earnings.

Gas prices have fallen in Southern California over the past week, but they’re still well above the national average. On Wednesday, the average price for a gallon of regular in Los Angeles County was $3.93 a gallon. That was down 21 cents from a week ago but $1.30 above Wednesday’s national average of $2.63 a gallon.

San Bernardino County’s average price Wednesday was $3.89 per gallon, down 20 cents from a week ago but $1.26 above the U.S. average.

One of the lowest Southland prices Wednesday could be found at a Costco station in San Dimas and a Rocket Fuel station in Long Beach, both of which were selling regular for $3.39 a gallon.

Conversely, a Valero station in Norwalk posted regular at $4.99 a gallon.

“All of the refineries are running relatively smoothly now, with the exception of the ExxonMobil refinery in Torrance,” said Allison Mac, a West Coast petroleum analyst with

The ExxonMobil facility provides 8 to 10 percent of California’s gasoline supply, but it is currently operating at below 20 percent of its capacity.

Still, Mac said California’s refineries are collectively operating at 91-percent capacity.

“We have not seen them run that well since early December in 2014,” she said. “And wholesale gas prices in the L.A. are below $2 a gallon. During the super big price spikes that was well above $3 a gallon.”


A new report from Consumer Watchdog shows that Californians are getting gouged at the pump:

• Californians have paid more than $4.8 billion more than the rest of the country for regular gasoline since the price spike began in February.

• Refiner margins — the amount of money they collect for each gallon of gasoline — set a record for California in July at $1.61 for branded stations.

• Valero’s California profits hit $294 million during the second quarter of 2015 — 11 times more than a year earlier.

• Californians often pay $1 more per gallon for gas than the national average.

Source: Consumer Watchdog


Reach the author at [email protected] or follow Kevin on Twitter: @SGVNBiz.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases