HomenewsreleaseOil Companies › CA Data Shows Record Gas Price Spikes = Record Return For California Refiners; Oil Refiners Double Their Margins From Recent Pain at The Pump For Consumers

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CA Data Shows Record Gas Price Spikes = Record Return For California Refiners; Oil Refiners Double Their Margins From Recent Pain at The Pump For Consumers

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Jamie Court, Cody Rosenfield & Liza Tucker

Santa Monica, CA -- Newly posted data from California oil refiners shows that record price spikes at the pump have translated to a record high return to the oil companies of $1.17 per gallon in May of 2015. The average amount that a refiner receives for a gallon of gasoline has been just 46 cents since 1999, according to the California Energy Commission (CEC), but recently updated data on the CEC website shows that in May refiners took home more per gallon than ever before. Consumer Watchdog had urged the CEC to update the data, which had not been posted since August.

In Los Angeles, gasoline prices currently stand at $4.25 per gallon, over a $1.50 more than the nationwide average, by far the largest gap in recorded history. Across the state prices prices average $3.89 per gallon, $1.10 more than the American average.

"When oil refiners are taking home a record $1.17 per gallon it’s very clear that they are the source of Californian’s pain at the pump and the beneficiaries of the billions more Californians are paying for their gasoline,” said Jamie Court, president of Consumer Watchdog. “The governor and legislature should deter this type of gouging by establishing a windfall profits tax and forcing refiners to open their books and justify their inventories, refinery outages and profits."

Date          Refiner Margin per Gallon
May 2015                    $1.17
May 2014                    $0.50
Average 1999-2015    $0.46

 

The CEC data is provided by California’s oil refiners, which is aggregated by the agency and put online for public consumption. Refiner margin is defined as the costs & profits that a refiner receives for every gallon of gasoline, calculated as the gap between the cost of crude oil, and the wholesale price of gasoline.

Consumer Watchdog’s research has shown that low inventories and recent exports of California’s refined supply have sent California gasoline prices to a record gap with American gas prices.  Refined supplies are being exported to South and Central America even as low refining capacity and inventories in the state are pushing pump prices higher.

“This historic pay day for refiners shows that they have every interest in keeping inventories low and pump prices high,” said Cody Rosenfield, a researcher with Consumer Watchdog. “The state needs to step in and require reasonable inventory levels to be maintained.”In California four oil refiners control 78% of the state’s gasoline capacity. The consolidation has led to a lack of competition, and unwillingness to undercut competitors’ prices, despite record profits per gallon.

Californian drivers have shelled out $4.5 billion more for their gasoline than US drivers from February to June, Consumer Watchdog said today based on relative consumption and the difference in prices.

The data on the California Energy Commission web page mysteriously went offline in August of last year, just as the price of crude oil began to drop. After a Public Records Act request from Consumer Watchdog and public criticism, the page came back online (http://energyalmanac.ca.gov/gasoline/margins/)

According to the California Energy Commission, inventories have been below normal levels in California since last August.  In May and June, as inventories began to return to normal levels, refiners began charging 30 cents more to their own branded gas stations for wholesale gasoline than they were charging to unbranded or independent stations. Consumer Watchdog exposed the tactic as a way to keep gasoline prices artificially high and presented evidence of how it constituted price fixing to the Attorney General in this analysis (http://consumerwatchdog.org/resources/wholesalegasolinemanipulaitonanalysis.pdf) delivered on June 30, 2015.

Analysis of the newly disclosed CEC data verifies Consumer Watchdog’s earlier claim that there is an historic gap between what refiners are charging branded and unbranded stations.


In July, imports halted as Consumer Watchdog tracked tankers exporting millions of gallons of refined products from California to South and Central. (http://www.consumerwatchdog.org/newsrelease/oil-refiner-profiteering-behind-huge-gasoline-price-run-watchdog-questions-exports-fuel-)