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Profit Reports Show Oil Refiners Are Gouging Californians; Profits per Gallon Double

Wed, 05/11/2022 - 09:53
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Legislation Would Require All CA Refiners To Disclose CA Profits Monthly

Oil Profits

Los Angeles, CA -- The latest investor profits reports show that California oil refiners are making unprecedented profits from refining oil into gasoline in the first quarter of 2022. 

Some California oil refiners report profits from the first quarter of 2022 that are more than twice as high as those reported by the same refiners in other regions and as much as five times more than in the first quarter of 2021.  
 
“Despite the oil industry’s claims that the $1.50 extra per gallon Californians pay at the pump is due to taxes and environmental standards, first quarter profit reports show that California is nothing more than an ATM for oil refiners,” said Jamie Court, president of Consumer Watchdog.

“These profit reports show the Golden State Gouge is real. Oil refiners exploited the crisis in Ukraine to make a mint from California drivers.”
 
PBF Energy reports its crack spreads – the difference between the price of the crude oil it processes and petroleum products it sells – from both of its refineries in California on a quarterly basis.  
 
For the first quarter of 2022, PBF’s profits from its LA refinery grew to $32.84 per barrel from $15.75 per barrel in the first quarter of 2021.  With 42 gallons in a barrel of gasoline, this means that PBF made about 78 cents per gallon on the gasoline it sold in Los Angeles from January 1 thru March 31st.  That compares to 37 cents per gallon profits in LA in Q1 2021and 42 cents per gallon profit from its Midwest refinery in the first quarter of 2022.

"Since prices only tipped $6 per gallon well into the reporting period, this means that PBF likely made $1 per gallon profits on the gasoline sold in Southern California from March through May," said Court. "That's an obscene level of profits that should be a wake up call in Sacramento."
 
With gasoline prices skyrocketing only at the end of Q1, this shows the extreme profits California oil refiners have been making off the opportunity to charge more based on the increase in world crude oil prices.  California oil refiners charge gasoline prices reflective of $109 per barrel crude oil prices. Profit reports reveal, however, that their crude oil costs are significantly less, leading to the unprecedented refining margins compared to previous California margins and margins across the rest of America.
 
Most California refiners don’t break out their margins by refinery as PBF does, but all report margins or crack spreads on a Western regional basis.  Given that California has the highest gas prices in America, $1.50 more per gallon than US gasoline prices, the California refining margins for these companies, if reported by state and not region, would almost certainly be greater than reported in Western region margins.
 
SB 1322 (Allen), sponsored by Consumer Watchdog, requires every California oil refiner to report their per barrel profit margins monthly.  “With this information, California officials will be equipped to respond to periods of gouging like we are currently seeing,” said Court. "The legislature needs to pass SB 1322 on an urgency basis with a two-thirds vote so that it can take effect immediately and we can monitor profit spikes this summer."
 
Chevron reports its refinery margins on a regional basis, but not by quarter, only year.  Still, Chevron’s first quarter profit report indicated “U.S. downstream operations reported earnings of $486 million in first quarter 2022, compared with a loss of $130 million a year earlier. The increase was mainly due to higher margins on refined product sales and higher earnings from the 50 percent-owned Chevron Phillips Chemical Company.” 
 
Marathon’s Western region crack spread was $19.99 per barrel in Q1 2022, compared to $12.35 in the Midwest and $13.80 in 2021 in the West.
 

Profits Per Gallon—West Coast Region
 
Oil Company                   1st Q 2022                        2021                               2020

Chevron
Profits Per Gallon
N/A
 
 37 Cents 24 Cents
Marathon
Profits Per Gallon
47 Cents vs 
28 Cents 1st Q 2021
33 Cents 22 Cents
PBF Energy LA
Profits Per Gallon
78 Cents vs 
37 Cents 1stQ 2021
 
 
 
 
48 Cents 27 Cents
PBF Energy SF
Profits Per Gallon
 
70 Cents vs 
30 Cents 1st Q 2021
49 Cents 23 Cents
Phillips 66
Profits Per Gallon
42 Cents vs 
7 Cents 1st Q 2021
18 Cents 8 Cents
Valero
Profits Per Gallon
33 Cents vs
12 Cents 1st Q 2021
23 Cents 13 Cents

  

Phillips 66’s Western refining margins were $17.68 per barrel in Q1 2022, compared to roughly $7 per barrel in its Midwest and Gulf Coast refineries, and $7.49 per barrel in the West in 2021. Remarkably, Phillips 66’s Q1 2021 margins were $3.33 per barrel.  The increase from Q1 2021 to Q1 2022 is more than five-fold.
 
Valero’s Q1 2022 refining margin for its Western region was $13.97 per barrel, which is greater than all its other regions and more than the $9.75 per barrel made in the West Q1 2021. Valero’s Q1 2021 margin was $5.09, so its Q1 2022 margin is more than double.
 

Profits Per Gallon By First Q 2022 and Year End 2021

 
Refiner           West Coast     East Coast   Mid-Continent    Gulf Coast           World  

Chevron
Profits Per Gallon
1st Q ’22:
N/A
 
2021:
37 Cents
N/A 1st Q ’22:
N/A
 
2021:
N/A
1st Q ’22:
N/A
 
2021:
31 Cents
1st Q ’22:
N/A
 
2021:Singapore/Dubai
11 Cents
Marathon
Profits Per Gallon
1st Q ’22:
47 Cents
 
2021:
33 Cents
N/A 1st q ’22:
29 Cents
 
2021:
26 Cents
1st Q ’22:
38 Cents
 
2021:
21 Cents
N/A
PBF Energy
Profits Per Gallon LA/SF
1st Q ’22:
LA: 78 Cents
SF:  70 Cents
 
LA ‘21: 47 Cents
SF ‘21: 49 Cents
1st Q ’22:
51 Cents
 
 
2021: 40 Cents
1st Q’ 22:
42 Cents
 
 
2021: 39 Cents
1st Q’ 22:
57 Cents
 
 
2021: 38 Cents
N/A
Phillips 66
Profits Per Gallon
 
1st Q ’22:
42 Cents
 
2021: 17 Cents
N/A  
1st Q ’22: 
19 Cents
 
 
2021: 23 Cents
 
1st Q ’22: 
18 Cents
 
 
2021: 11 Cents
1st Q ’22:
Europe: 28 Cents
 
Worldwide: 25 Cents
 
2021:
Europe:
18 Cents
Worldwide: 17 Cents
Valero
Profits Per Gallon
1st Q ’22: 
33 Cents
 
2021: 23 Cents
N/A 1st Q ’22: 
24 Cents
 
2021: 22 Cents
1st Q ’22: 
31 Cents
 
2021: 20 Cents
 
1st Q ’22:
30 Cents
 
2021: N. Atlantic Region: 23 Cents

Oil refiners freely share their margins or crack spread, but the measures are inconsistent and not published frequently enough to pinpoint periods of price gouging or specifically for California.  SB 1322 would require monthly standardized reporting of California oil refiners’ margins that would allow the public and regulators to pinpoint periods of price gouging.
 
In addition, existing California Energy Commission data and reports on “refiner margins” do not appear to account for actual crude oil costs of the refiners and are misleading. The margins appear to reflect the world price of crude oil, not the actual costs paid by refiners, who have long term contracts for crude oil and can pay half as much as the world crude price, therefore reaping a huge benefit when crude oil prices skyrocket.

Refining Margins Per Barrel—West Coast Region
 
Oil Company                   1st Q 2022                        2021                               2020

Chevron
Refining Margin
N/A
 
$15.57 $10.16
Marathon
Crack Spread
$19.99 vs $12.09 1stQ 2021 $13.80 $9.26
PBF Energy LA
Crack Spread
$32.84 vs $15.75 1stQ 2021
 
 
 
 
$20.10 $11.30
PBF Energy SF
Crack Spread
 
$29.39 vs $12.92 in 1st Q 2021 $20.55 $9.99
Phillips 66
Refining Margin
$17.68 vs $3.33 in 1st Q 2021 $7.49 $3.43
Valero
Refining Margin
$13.97 vs $5.09 in 1st Q 2021 $9.75 $5.77

 
  

Refining Margins Per Barrel 2021 By First Q 2022 and Year End 2021

 
Refiner           West Coast     East Coast   Mid-Continent    Gulf Coast           World 

Chevron
Refining Margins
1st Q ’22:
N/A
 
2021:
$15.57
N/A 1st Q ’22:
N/A
 
2021:
N/A
1st Q ’22:
N/A
 
2021:
$13.29
1st Q ’22:
N/A
 
2021:Singapore/Dubai
$4.85
Marathon
Crack Spreads
1st Q ’22:
$19.99
 
2021:
$13.80
N/A 1st q ’22:
$12.35
 
2021:
$10.95
1st Q ’22:
$16.14
 
2021:
$8.89
N/A
PBF Energy
Crack Spreads LA
Crack Spreads SF
1st Q ’22:
LA: $32.84
SF:  $29.39
 
2021: $20.10
2021:$20.55
1st Q ’22:
$21.69
 
 
2021:$16.84
1st Q’ 22:
$17.94
 
 
2021:$16.34
1st Q’ 22:
$24.14
 
 
2021:$16.03
N/A
Phillips 66
Refining Margins
 
1st Q ’22:
$17.68
 
2021:$7.49
N/A 1st Q ’22:$7.89
 
 
2021:$9.65
1st Q ’22: $7.71
 
 
2021: $4.92
1st Q ’22:
Europe: $11.71
 
Worldwide: $10.55
 
2021:
Europe:
$7.48
Worldwide: $7.15
Valero
Refining Margins
1st Q ’22:$13.97
 
2021:$9.75
N/A 1st Q ’22:$10.45
 
2021: $9.59
1st Q ’22:$13.13
 
2021: $8.60
1st Q ’22:
$12.87
 
2021: N. Atlantic Region: $9.81