Newsom battles Big Oil capitalizes on Valero’s 500% profit increase amid rising gas prices

State Gavin Newsom speaks to reporters outside the California Natural Resources Agency in October. When he announced on January 7 that he would call a special session of the state legislature to impose a new tax on oil companies in response to higher gas prices and rising profits. (Rich Pedroncelli/Associated Press)

State on Tuesday, Gavin Newsom, targeted Valero Energy Corp.’s “record profit” this year, escalating its war with the robust oil industry as gasoline prices soared.

In a statement, Newsom renewed its call for price gouging “to put those profits back in Californians pockets.”

Valero’s third-quarter financial report showed the San Antonio company earned $2.82 billion from July to September, with Newsom up more than 500% from its reported $463 million earnings in the same quarter last year.

“These profits came amid a record gas price surge on consumers over this time period, despite falling crude oil prices,” Newsom said. Said.

Valero reported a profit of $4.7 billion for the second quarter of 2022, up 2.801 percent from the previous year, and said the company has made $8.3 billion so far this year.

“Big Oil is defrauding Californians, driving gas prices and making record profits,” Newsom said. “If Valero increased profits by over 500% in just one year, Californians were paying at the pump instead of spending those savings.”

Other oil companies are expected to release their third-quarter earnings reports in the coming weeks.

The governor said he was taking action to lower prices by ordering a switch to winter blended gas and demanding accountability from oil companies and refiners doing business in the state.

Newsom’s office credits its actions with contributing an 11% drop from $6.42 per gallon to $5.71 per gallon, California’s record high.

According to the nonprofit Consumer Watch, west region profits from Valero’s California refineries exceeded 60 cents per gallon.

“This is only the second time such an unexpected drop of over 50 cents per gallon has been reported since 2001,” Consumer Watchdog said. “The first time was in the second quarter of 2022, California profit was 83 cents per gallon while Valero’s California profit was once again higher than any other region in the country and the world.”

This month, Newsom announced that it is seeking a special legislative session in December. 5 legislators to consider passing taxes on the excess profits raked by oil companies due to the rise in California gas prices.

The governor said he was working with the leadership of the Democratic-Controlled Legislature to determine the best way to tax profits and return that money to Californians who were stung every time they filled their gas tank.

“This is just price voting. They can get away with it,” Newsom told reporters at the time. “Each of you, they take advantage of you every day. They pocket hundreds of millions of dollars a week, stuff their pockets at your expense, and then they pollute this planet and leave us all. The external realities and costs associated with it.”

Valero spokespersons did not respond to a request for comment on Tuesday.

This story was originally published in the Los Angeles Times.

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