September 27, 2023 Breaking News, Latest News, and Videos

​​Doubt Removed: Oil Refiners Gouging Us

By Tom Elias, Columnist

There was some room for doubt back in February, when gasoline prices rose precipitously: Until the oil companies who refine most California gas unveiled their first-quarter profits, it would be impossible to be sure the spike stemmed from price gouging.

That was because the pump price increase from about $4.30 per gallon to nearly $6 (and more in some places) came just as the United States announced a boycott on Russian oil as a punishment for the invasion of Ukraine.

Price gouging seemed the logical explanation for the hike. Russian oil amounted to less than 3 percent of California’s supply; why should its sudden disappearance cause a price hike of 12 times that much?

Doubt about this should now disappear from the minds of consumers. They were taken advantage of by oil companies in a systematic, cartel-like manner as every gasoline refiner raised prices at the same moment.

That is now clear from the very eagerly-awaited quarterly financial reports. They show profits of the five major firms making 96 percent of this state’s gasoline all rose dramatically in the first quarter. Because the price gouging did not begin until mid-February, it had no effect for fully half the first-quarter time period.

The five companies include Chevron, Marathon, Valero, PBF Energy and Phillips 66. Their results, says Jamie Court, head of the Consumer Watchdog advocacy group, “show that the Golden State Gouge is real. Oil refiners exploited the crisis in Ukraine to make a mint from California drivers.” Yes, they also profiteered in the rest of America, but not like they did here.

One difficulty in measuring this stems from the fact that most big California refiners do not break out their California profits from what they make worldwide.

An exception is PBF Energy, owner of refineries in New Jersey, Delaware, Louisiana, plus those in Martinez and Torrance that formerly belonged to Shell and Exxon Mobil. PBF’s profits from its Torrance facility grew from $15.75 per barrel in 2021 to $32.84 this year, returning more than twice the previous take. That meant PBF, which markets to name brands, smaller chains and unbranded gas stations, made about 78 cents per gallon in profit this year compared with 42 cents last year.

While other refiners here don’t break things down by state or individual refinery, Chevron made a $480 million profit in the U.S. in this year’s first three months, compared with a loss of $130 million last year.

The other big refiners reported similar huge increases in profitability, the obvious result of their price gouging. When he announced the ban on Russian oil, President Biden warned them not to gouge, but they did it anyway, with no penalty.

Partly, that’s because most refiners effectively hide their per-gallon profit margin. This could end in California if the Legislature this summer passes a bill known as SB 1322, sponsored by Democratic state Sen. Ben Allen of Santa Monica. Allen’s measure would force the Big Five refiners in this state to report how much gas they make and sell here and the margins they net from each gallon sold to drivers.

Many Californians habitually blame the fact that pump prices here are nearly the highest in the nation on California’s higher-than-usual fuel taxes. But those levies only account for about 60 cents per gallon, and the difference between the average price in California and elsewhere is about $1.30. For sure, drivers here deserve to know why they pay an unexplained 70 cents more per gallon than folks just across state lines.

Says Court, “California has been an ATM for oil refiners for too long.” He suggests that if oil companies had to report their per-gallon profits on a regular basis, they would feel some pressure to hold the line on prices better than they have.

So a lot of money hangs on the fate of Allen’s bill, which passed its first Senate committee test unanimously. That’s money which could help a lot of families now forced to choose between buying gas or food or shoes.

Email Thomas Elias at tdelias@aol.com. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

in Opinion
Related Posts

S.M.a.r.t Column: Civic Center Debate

September 24, 2023

September 24, 2023

Civic Center Debate Last year, the City declared the Civic Center Auditorium surplus property after a decade of neglect and...

SMa.r.t.Column: THE ONCE AND FUTURE SANTA MONICA CIVIC AUDITORIUM

September 18, 2023

September 18, 2023

This week SMa.r.t. is focusing on the historic Civic Center Auditorium and residents’ efforts to save it from a misdirected...

S.M.a.r.t Column: The Battle for the Planning Commission: A Circus of Political Maneuvers

September 10, 2023

September 10, 2023

Ah, the wonderful world of city politics! Ladies and gentlemen hold on to your hats as we delve into the...

S.M.a.r.t Column: The 30 MPH City Part 2

September 4, 2023

September 4, 2023

Last week’s article discussed why we need to continue our program to slow down our streets to save lives, given...

S.M.a.r.t Column: The 30 MPH City Part One

August 27, 2023

August 27, 2023

Some ideas sound extreme when first presented but acquire more credibility when you think about it, and particularly when conditions...

Open Letter On the California Voting Rights Case Against the City of Santa Monica

August 25, 2023

August 25, 2023

By Oscar de la Torre Like many Santa Monicans and Californians who care about fair elections, I watched the California...

S.M.a.r.t article: Save the Civic – Keep it Alive

August 6, 2023

August 6, 2023

Santa Monica Civic Auditorium: A Historic Gem That Shaped Our City’s Cultural Legacy. Save Santa Monica’s Heritage The Santa Monica...

SMa.r.t. Column: Counseling The City Council

July 28, 2023

July 28, 2023

This week, our SMa.r.t. column is authored by concerned resident Nikki Kolhoff. Nikki has been an active voice in the...

SMa.r.t. column: The Impact of Private Companies on Our City Streets: A Call for Safety

July 21, 2023

July 21, 2023

As someone who’s always out and about, whether walking, biking, or driving, this writer has noticed a worrying trend that...

A Seismic Duality

July 21, 2023

July 21, 2023

Last month the City issued a follow-up report on its success in complying with its Seismic Retrofit Program. This 2017...

SMa.r.t. Column: The Future Of Santa Monica Airport (SMO)

July 4, 2023

July 4, 2023

On January 1, 2029, the City Council will be given the legal right to vote on whether to maintain the...

A Comfortable City for All

June 23, 2023

June 23, 2023

Picture this: a concerned citizen takes to Facebook to ask about the mysteriously vanishing benches and chairs on the Promenade....

An Open Letter To Santa Monica

June 16, 2023

June 16, 2023

Declining Business Climate in Downtown Santa Monica By Jennifer Rush, Blue Plate Restaurant Group To all that do business, live,...

Thirsty Santa Monica: Running Dry

June 11, 2023

June 11, 2023

The thirst is real, and Santa Monica is feeling it. The problem? Santa Monica relies on the Metropolitan Water District...

Landmarks Commission Back From the Dead

June 2, 2023

June 2, 2023

For over three years, SMa.r.t. (Santa Monica Architects for a Responsible Tomorrow) has consistently warned that recently increased intense development...