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Overpriced California Gasoline Fuels Tripling of Valero’s Average Annual Profits

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Jamie Court & Cody Rosenfield

Santa Monica, CA -- Valero, California’s fourth largest oil refiner, reported $852 million in profits from oil refining in California in 2015, blowing past prior years’ profits by treating drivers who buy California gasoline as cash cows, Consumer Watchdog said today.

The company’s California refining profits were triple the company’s average of $216 million in profits over the last five years.

“California oil refiners are taking drivers to the cleaners because crude oil prices have fallen to modern lows while California gas prices stay a dollar a gallon higher than in the rest of the nation,” said Consumer Watchdog President Jamie Court.

“The only reason that gas prices here are so high is because refiners can charge this much money. It has nothing to do with the usual industry scapegoats, and everything to do with fattening refiners’ profits. It's time the legislature adopted a windfall profits tax on California oil refiners."

The Petroleum Market Advisory Committee to California’s Energy Commission is meeting on February 8 to discuss recommendations on how to deal with abnormal prices in California. California consumers were overcharged $10 billion at the pump in 2015 compared with other US drivers.

Valero executives on a call with investors said that crack spreads—the difference between the cost of buying oil and operating a refinery versus the retail price at the pump—had never been higher thanks to the low cost of crude oil, so all refiners can make good money.

Valero’s method of keeping prices high included exports that helped keep supplies of gasoline in California tight, exacerbating gas price spikes this year. Company executives told investors that they had exported 157,000 barrels per day of gasoline from all their U.S. refineries combined in 2015.

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