The five major oil refiners all rejected invites to the hearing on the record gas price spike of 86 cents in 10 days earlier this year
Sacramento, Calif.—The California Energy Commission (CEC) held a hearing on Tuesday on the record gas price spike of 86 cents in 10 days earlier this year that resulted in record profits for oil companies, digging into the fact that no state regulations or costs had changed and refinery maintenance only accounted for 5.8% of California’s gas supply.
The five major oil refiners — Chevron, Marathon, Phillips 66, PBF Energy and Valero — all rejected invites to the hearing. While the oil industry refused to provide any answers, experts stressed the need for new transparency and accountability measures to help prevent oil companies from spiking prices in the future.
The California Energy Commission (CEC) hosted the public hearing with oil industry representatives and experts to get answers about this year’s gas price hikes that resulted in record profits of $63 billion in just 90 days, and how to prevent such price increases in the future.
“Every Californian deserves to know why we were being fleeced at the pump even as gas prices declined across the country and crude oil prices were going down. The oil industry had their chance today to explain why they made record profits at our expense but they chose to stonewall us. That’s because they have no explanation — big polluters are lining their pockets while they cause financial pain for millions of California families and threaten the very future of our planet. With the legislature’s support and engagement, we’re going to hold these companies accountable with a price gouging penalty that will deliver relief to Californians,” said Gov. Gavin Newsom.
At the hearing, experts laid out in detail the unprecedented divergence between California’s gas prices and prices across the country and that periodic price spikes have intensified in recent years, disproportionately affecting low- and middle-income families. However, with the oil refiners’ absence at the hearing, commissioners were unable to get adequate explanation for this year’s price spike.
Gov. Newsom is calling a special session of the legislature on December 5 to pass a price-gouging penalty on oil companies that choose to rake in excessive profits at the expense of Californians.
Tuesday’s hearing follows the CEC having requested written responses to questions about price spikes despite the cost of crude oil going down — questions that the companies largely failed to answer in writing.
In the third quarter of 2022, from July to September, oil companies reported record high profits:
- Phillips 66 profits jumped to $5.4 billion, a 1243% increase over last year’s $402 million;
- BP posted $8.2 billion in profits, its second-highest on record, with $2.5 billion going towards share buybacks that benefit Wall Street investors;
- Marathon Petroleum profits rose to $4.48 billion, a 545% increase over last year’s $694 million;
- Valero’s $2.82 billion in profits that were 500% higher than the year before;
- PBF Energy’s $1.06 billion that was 1700% higher than the year before;
- Shell reported a $9.45 billion haul that sent $4 billion to shareholders for stock buybacks;
- Exxon reported their highest-ever $19.7 billion in profits;
- Chevron reported $11.2 billion in profits, their second-highest quarterly profit ever.