California Democrats requested explanations from oil and gas producers and refiners for continued increasing gas prices, accusing oil and gas producers and refiners of inflating prices to maximize profits.
Here are the facts: crude oil prices are on the decline. Nevertheless, gasoline costs are increasing. “That’s because greedy oil firms are gouging you off,” tweeted California Governor Gavin Newsom on Thursday, adding that he planned to increase oil company taxes in retaliation. They are generating record profits at your cost. To put money back in your pockets, I propose a new tax on these unscrupulous oil firms.
California Democrats requested explanations from oil and gas producers and refiners for continued increasing gas prices, accusing oil and gas producers and refiners of inflating prices to maximize profits.
Here are the facts: crude oil prices are on the down. Nevertheless, gasoline costs are increasing. “That’s because greedy oil firms are gouging you off,” tweeted California Governor Gavin Newsom on Thursday, adding that he planned to increase oil company taxes in retaliation. They are generating record profits at your cost. To put money back in your pockets, I propose a new tax on these unscrupulous oil firms.
David Hochschild, the chair of the California Department of Energy, sought explanations from the industry, tweeting, “Last week, I wanted answers from the oil industry about the recent gas price surge, which has imposed an unsustainable burden on Californians. The unexpected $1.54 increase in the price of a gallon of gasoline cannot be explained by maintenance alone.”
Valero Energy, located in Texas, filed a statement with one day to spare and provided a laundry list of why supplying the California market was difficult for any energy provider.
Scott Folwarkow, vice president of state government affairs for Valero, stated in the letter, “For Valero, California is the most costly operating environment in the country and has a highly unfriendly regulatory climate for refining.” “California policymakers have consciously chosen laws with the stated purpose of dismantling the refinery industry. California mandates refiners to pay high carbon cap-and-trade costs and loaded gasoline at the expense of low-carbon fuel regulations. As a result of these rules, it is unsurprising that California refineries have shut down entirely or shut down significant units. When refinery activities are suspended, the supply chain becomes less resilient.
Folkwarkow went on to explain that California had specified a unique gasoline blend that was unavailable in other regions of the country, implying that it had to be carefully created and that, in the event of a shortage, extra supplies could not be carried in from elsewhere.
“From the standpoint of a refiner and gasoline supplier, California is the most difficult market to serve in the United States for several reasons,” he said, adding, “California has established some of the most stringent, costly, and restrictive environmental regulatory standards in the world. California’s rules have made it challenging to expand refining capacity and have thwarted efforts to reduce refineries’ operational expenses.
Folwarkow cautioned the state that more taxes and restrictions, like the levy suggested by Newsom, would make the situation considerably worse.
“We believe the experts on the Commission realize that California cannot require a fuel that is not widely available outside of the West Coast, then burden or remove California’s refining capability, and then expect to have strong gasoline supplies,” he wrote. “Adding more expenses, in the form of new taxes or regulatory restrictions, would only further pressure the gasoline market and negatively affect refiners. These costs will ultimately be passed on to California consumers.”