California's sky-high gasoline prices translated into a big second-quarter profit for refiner Valero Energy Corp.
The San Antonio company said operating income from its two California refineries soared to $295 million for the quarter that ended June 30, or more than 11 times the $24 million earned in the year-earlier quarter.
Valero’s operations in California had a bigger year-over-year increase than any of the company’s other U.S. locations.
"Our plants operated safely and reliably, enabling us to generate strong results," Valero Chief Executive Joe Gorder said.
Valero posted second-quarter net income of $1.4 billion, or $2.66 a share, up from $651 million, or $1.22, in the same period last year. Revenue totaled $25.1 billion, down from $34.9 billion.
The profit report angered consumer advocates, who continued their call for more transparency from the oil refineries about their operations to ensure that motorists aren’t overcharged at the pump.
“Californians know they are being gouged at the pump and these windfall profits are an offense to the hard-working people of this state,” said Cody Rosenfield of Consumer Watchdog, a Santa Monica-based consumer advocacy group.
With Exxon Mobil’s Torrance refinery operating at less than 20% of its capacity, other refineries have seen a dramatic increase in their profits. The capacity of the Torrance refinery is 10% of the state’s total and 20% of Southern California’s total.
The Torrance refinery decreased operations after an explosion in February. The refinery might not return to full service until the end of the year.
California gasoline prices are typically higher than the rest of the nation, in part because of the state's taxes and fees on gasoline and the special blends produced to help protect the environment.
But this year, troubled refineries and low inventories helped push gasoline prices higher in the Los Angeles area. The average price for a gallon of regular gas reached as much as 50 cents more than the rest of the state and $1.50 more than the national average.
Prices at some downtown L.A. gas stations topped $5 a gallon. The average price of a gallon of gasoline in the L.A. region Thursday was $4.12, according to the Automobile Club of Southern California.
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