June 28, 2022
By Ramona du Houx
A bill requiring oil refiners to disclose their per gallon profits monthly passed out of the California Assembly Natural Resources Committee by a vote of 8 – 3. The legislation has already passed out of the California Senate by a vote of 22 – 4.
SB 1322 (Allen) requires the oil refiners to disclose monthly their refining profits — the difference between average cost they pay for a barrel crude oil and the average price they charge for the finished barrel of gasoline, minus their expenses. With 42 gallons in a barrel, the public will know exactly how much oil refiners make per gallon of gas in California.
“For my refinery community, this is a major step towards transparency that we need. Our children suffer from the pollution Chevron causes. They can’t do the sports children normally enjoy because they have chronic breathing issues like asthma, all because they are forced to breathe dirty air from this industry. Now, many struggle to pay for gas. I thank the assembly and look forward to the final passage,” said Vice Mayor Eduardo Martinez, Richmond, CA, Elected Officials to Protect America CA Leadership Council.
These industries reported bumper profits, without raising the cost of extraction but increasing the price of gas. These industries not only get a free pass to emit heat-trapping gases that exacerbate extreme weather and climate disasters, they continue to get tax-payer funds. In 2020 the coal, oil, and natural gas companies received $5.9 trillion in subsidies.
Californians are paying $1.40 more gallon for their gasoline than the average US driver. Environmental costs add about 60 cents per gallon.
“Consumers deserve to know how much oil refiners are making off their pain at the pump,” said Jamie Court, president of Consumer Watchdog. “Recent quarterly profit reports suggest California oil refiners are pocketing $1 per gallon off the recent price spikes at the pump. That’s unconscionable.”
Refining margins are typical industry measures. In fact, California refining margins are already published quarterly by two of California’s five oil refiners – so this is information that is already public. PBF publishes refining profits from its San Francisco and LA refineries, which show that it made 78 cents per gallon on the gasoline it sold in the first quarter of 2022. That’s double its profits from other parts of the country. Valero also publishes its margins for its West Coast refineries, which are exclusively in California. The other refiners publish Western regional margins. You can read about the refining profits reported by all California refiners in our review of the latest investor report here.
Since prices only tipped $5 per gallon in March, significantly into the first quarter reporting period, this means that PBF likely made more than $1 per gallon profits on the gasoline sold in Southern California from March through May.
“Requiring oil refiners to post their profits per gallon monthly will allow the public, regulators, and legislators to pinpoint periods of gouging and have the opportunity to respond,” said Court. “When people have to choose between gas and food, it’s time we heighten our scrutiny of oil refiner profits. Ultimately, we need a new price gouging law to stop oil refiners from turning California into an ATM.”