October 20, 2022
Los Angeles, CA — A review of oil refiner shareholder reports shows California oil refiners made an average of 32 cents per gallon annually from 2001 – 2021 compared to unprecedented profits of between 79 cents per gallon and $1.01 per gallon in the second quarter of 2022.
Governor Newsom has called a special legislative session for December 5th to address these windfall profits.
None of the four California oil refiners who reported windfall profits in the second quarter of 2022 had previously made more than 50 cents per gallon annually in all their years doing business in California. Chevron’s profits only exceeded 50 cents per gallon three times in the last twenty years.
View the chart revealing the oil refiners’ publicly reported profits per gallon from 2001 through 2022 here.
Consumer Watchdog released a video narrated by actor Mike Farrell that shows the need for the legislature to enact a price gouging rebate.
“Over the last two decades, California oil refiners have averaged about 30 cents per gallon in profits, and rarely made more than 50 cents per gallon in profit. Now the oil refiners are raking in more than $1 per gallon in profits,” said Jamie Court, president of Consumer Watchdog. “These windfall profits must be rebated to California drivers to stop oil refiners’ price gouging. The reason Californians are paying $2.50 more per gallon for their gasoline is clearly price gouging. Oil refiners should have to return to the public whatever profits they make over 50 cents per gallon.”
Five oil refiners make 97% of the state’s gasoline and sell it directly to retail gas stations in the state. They set the price at every retail pump.
Applying a windfall profits cap at 50 cents per gallon, California’s four oil refiners that provide gas to 68% of the market and report their quarterly profits would owe Californians more than $930 million already for their excess profits in the first half of 2022, according to an estimate from Consumer Watchdog. View the calculation. Chevron, which makes gas for 29% of the market, did not report its profits per gallon this year yet but consistently has had among the highest refining profits.
Oil refiners will report their third quarter earnings to investors beginning next week: Valero October 25, PBF October 27, Phillips November 1, Marathon November 2, Chevron November 4.
“Third quarter profits reports should be very revealing,” said Court. “The proof of the gouging always comes out in the profit reports.”
A new law, SB 1322 (Allen), backed by Consumer Watchdog, will require oil refiners to post their profits per gallon from refining monthly beginning in January. This will give California the basis to monitor for price gouging in real time and, if a price gouging rebate is enacted, to give the excess profits back to drivers.
Oil refiners’ reports to investors only reveal Western regional margins, not California specific profits, which are generally higher. Two of the five oil refiners, PBF and Valero, have their Western refineries in California only. Chevron does not report its gross refining margins quarterly, only annually. Gross refining margins (the difference between the cost of crude oil bought and price of petroleum products produced and sold by the refiner) are reported per barrel, which can be expressed per gallon by dividing by 42, the number of gallons in a barrel.
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