Gas prices in California are skyrocketing again. In LA, they are over $7 a gallon. Gavin Newsom falsely claims the extraordinarily high gas prices in California are the fault of greedy oil and gas companies. He must have gotten that idea from Joe Biden. Newsom’s plan, such as it is, puts even more taxes on the companies that are overtaxed now. That will increase prices at the pump.
California’s gas prices are the highest in the nation, and so are the taxes on gasoline.
Gas prices in California are high due to regulations, taxes, and restrictions passed by the state and refinery outages. They are not the result of greedy oil companies.
NEW: I’m calling for a Special Session to address the greed of oil companies. Gas prices are too high. Time to enact a windfall profits tax directly on oil companies that are ripping you off at the pump.
— Gavin Newsom (@GavinNewsom) October 7, 2022
Valera Energy responded to the reasons for the high taxes.
NEW: VALERO responds to California’s demand for answers recent gas price spike.
“As demanded with one business day to respond…”
“California is the most challenging market to serve in the United States for several reasons.” pic.twitter.com/r2T2UQleme
— Ashley Zavala (@ZavalaA) October 8, 2022
“For Valero, California is the most expensive operating environment in the country and a very hostile regulatory environment for refining,” Scott Folwarkow, Vice President of State Government Affairs, wrote in the letter.
“California policymakers have knowingly adopted policies with the expressed intent of eliminating the refinery sector. California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with the cost of the low carbon fuel standards. With the backdrop of these policies, not surprisingly, California has seen refineries completely close or shut down major units. When you shut down refinery operations, you limit the supply chain’s resilience.”
Folkwarkow explained that California had mandated a special fuel blend that was not available in other parts of the country. This means it had to be specially formulated and that in times of shortage, additional supply could not be simply shipped in from elsewhere.
“From the perspective of a refiner and fuel supplier, California is the most challenging market to serve in the United States for several reasons,” he wrote. “California has imposed some of the most aggressive, and thus expensive and limiting, environmental regulatory requirements in the world. California policies have made it difficult to increase refining capacity and have prevented supply projects to lower operating costs of refineries.”
Folwarkow warned the state that additional taxes and regulations — such as the tax proposed by Newsom — would likely only serve to make the situation even worse.
“We believe the Commission experts understand that California cannot mandate a unique fuel that is not readily available outside of the West Coast and then burden or eliminate California refining capacity and expect to have robust fuel supplies,” he wrote. “Adding further costs, in the form of new taxes or regulatory constraints, will only further strain the fuel market and adversely impact refiners, and ultimately, those costs will pass to California consumers.”
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