California Governor Gavin Newsom has lashed out at Valero, which this week reported another financially strong quarter, saying the company was ripping off Californians by selling fuels at higher prices.
In a statement, Newsom said that “Big oil is ripping Californians off, hiking gas prices and making record profits. As Valero jacked up their profits by over 500% in just a year, Californians were paying for it at the pump instead of passing down those savings.”
“That’s why we’re taking action to implement a price gouging penalty to put these profits back in the pockets of Californians,” Governor Newsom said.
This is not the first time California’s governor has accused fuel retailers and the oil industry as a whole of taking advantage of customers. Earlier this month, Newsom said in another statement that “While crude oil prices are down, oil companies have increased gas prices in California by a record 84 cents per gallon in just the last 10 days.”
“Meanwhile, oil companies have raked in unprecedented profits on the backs of hard-working Californians – nearly $100 billion in the last three months alone,” he said. “Oil companies have failed to provide an explanation for the unprecedented divergence between prices in California compared to the national average.”
In the same statement, Newsom called for a windfall tax on the industry “to ensure excess oil profits go back to help millions of Californians who are getting ripped off.”
Newsom is currently campaigning for re-election, with the midterms coinciding with third-quarter profit season. This means there will likely be more attacks on the oil industry and threats of windfall profits, Bloomberg noted in a report this week.
Meanwhile, to address runaway prices, Newsom ordered an early start to winter-blend gasoline production, which is cheaper to produce than the summer blend.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.