Newsom blasts Valero's spike in profits

MILL VALLEY, CALIFORNIA - JULY 12: A customer prepares to pump gasoline into his car at a Valero station on July 12, 2021 in Mill Valley, California. The price of gasoline in the San Francisco Bay Area is the highest in the nation with an average pri

Governor Newsom continued railing against oil companies, accusing them of ripping Californians off and price gouging at the gas pump. "The third quarter profits, they come out next week and the week after," Newsom told reporters after Sunday’s gubernatorial debate.  We’ll see if they had your back during this stressful time, we’ll see if the oil companies had your back." 

This week, Valero Energy Corporation reported making $2.8 billion in the third quarter, between July and September. That’s up from $463 million in the same quarter last year. Newsom lashed out in a statement, saying in part: "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." 

In response to the nation’s highest gas prices despite falling crude oil prices, Newsom called a special legislative session on December 5. The governor wants lawmakers to pass a windfall profit tax on oil companies, and give it back to consumers. So far, there has been limited details about the proposal. After Sunday’s gubernatorial debate, Newsom answered questions about his plan. "A price gouging penalty to put money back in the pockets of people that are being taken advantage of," said Newsom. "It’s not only the right thing, it’s the moral and ethical thing to do." 

Valero did not respond to our request for comment, but the company previously denied price gouging and laid the blame on the state’s environmental regulations and energy policies. In response to the governor’s comments, the Western States Petroleum Association President said: "No one wants high energy costs, or the global market we have now that creates them. But, demonizing the oil industry must stop. What the Governor should do is promote an all of the above energy strategy and end his own policies that reduce oil supply and discourage investment in refining capacity and infrastructure.  These are the actions that create market uncertainties and higher costs to consumers."

At the debate, Newsom touted the inflation relief checks going out to Californians and pointed to action he’s taken to lower gas prices, like ordering a switch to winter-blend gas. Republicans including his challenger, State Senator Brian Dahle continue to call for a gas tax holiday. Dahle said, "The gas tax holiday is the fastest way to drive down inflation," said Dahle. "Those are the policies we put forth, and had the budget to take care of the highways, we should’ve done that." 

SEE ALSO: Newsom to call special legislative session over gas prices

UC Berkeley Haas Energy Institute economist Severin Borenstein said expect similar reports from other oil companies, but said more investigation is needed to pin point the exact cause of the prices. "All of the refiners are going to announce eye popping profits for the last quarter," said Borenstein. "All the ones that operate in California, they made a boat load of money. We are going to have to figure out why prices aren’t more competitive."