New Data Show CA Oil Refiners' Margins Grew To Unprecedented $1.50 Per Gallon During September Gas Price Spike; Profiteering Makes Case For Strong Price Gouging Penalty, Says Consumer Watchdog

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Dec 07, 2023, 13:19 ET

LOS ANGELES, Dec. 7, 2023 /PRNewswire/ -- New data posted by the California Energy Commission shows that as California gasoline prices were spiking in September at $5.70 per gallon California's big oil refiners raked in an average $1.49 per gallon in gross refining margins, nearly three times their 66 cents margins in January. The margin appears to be unprecedented as no margin that high has been reported publicly before.

The gross refining margin measures how much an oil refiner makes per gallon after the costs of crude oil, taxes and environmental fees are subtracted. Gross refining margins in California have historically been under 50 cents per gallon and equate to profits per gallon.

"This data proves California oil refiners profited wildly from California gasoline price spikes in September and is precisely why California needs to implement a strong price gouging penalty as soon as possible" said Jamie Court, president of Consumer Watchdog. "When the price of California gasoline climbed to as much as a $1.48 more than US gasoline prices in September, Californian oil refiners were laughing all the way to the bank. The only way to curb these insane profit margins is for the Energy Commission to establish a reasonable maximum margin after which a progressive penalty applies, which should be about 60 cents per gallon."

The California Energy Commission posts monthly gross refining margins under SB 1322 and is in the process of a rulemaking to determine whether a price gouging penalty is needed and at what level under SBx1 2. The rulemaking for the price gouging penalty is scheduled to conclude by June with a possible penalty to take effect in July.

"The price gouging penalty cannot come quickly enough with oil refiners taking advantage of Californians to the tune of over a dollar per gallon in pure profit at the refinery level alone," said Court. "These unprecedented margins need to stop and only a strong price gouging penalty can deter them."

Consumer Watchdog recently posted a Consumer Alert video warning the public about the oil refiners' deceptive mailer campaign blaming the government for the high cost of gasoline.

"This data makes it clear that it is refiners' profiteering that has driven up the price of gasoline in California to extreme levels, not governmental taxes or environmental fees," said Court.

SOURCE Consumer Watchdog