Photo: PATRICK T. FALLON / AFP / Getty Images
By: Manuel Ocaño / Special for Real America News Updated 07 Dec 2022, 19: 45 pm EST
Governor Gavin Newsom called an extraordinary session of the legislature to establish fines for gasoline distribution corporations that increase consumer prices.
“Big Oil is ripping off Californians,” declared the governor. Corporations have reported profits like never before by more than $45,450 millions altogether.
This Thursday was the first day in eight months that the average price of regular gasoline in California settled below $5 per gallon, at $4.400, but it is the most expensive gasoline in the United States and is at least $1.45 more expensive than the national average, according to the American Automobile Association (AAA).
“Don’t even tell me,” he said to The Opinion Mrs. Guadalupe Verduzco, “I just took my children to school, I take the opportunity to go on an errand and do any other lap that I have to do so that it is in the same route, but I feel as if I had gone on an excursion; I think I spend about $01 every day on gasoline” .
The governor said he called a special session “to increase price transparency and protect future Californians from scandalous price increases” to fuel.
The California Energy Commission convened a meeting this week with representatives of corporations, expert analysts and non-government groups to find out why consumer gasoline prices soared, but no company representatives attended the meeting, Commissioner Patty Monahan said.
“The lack of participation from refiners, participation in the discussion, really limits our ability to understand more deeply why Californians paid $2.45 more than other Americans”, said the commissioner.
The governor nador Newsom explained that it is a “deafening silence from the industry” so “a price gouging fine is needed to hold them accountable for speculating at the expense of California families.”
Although the industry has stated that the Russian invasion of the Ukraine caused a shortage of crude oil and that this shortage led to the increase in prices, an expert from the University of California at Berkeley, the director of the Haas Energy Institute at UC Berkeley, Severin Borenstein says the circumstances are different.
“This is not a crude oil cost issue; it is not a problem of import restrictions; nor is it a problem of refinery supply restrictions. Nor is it a problem of market isolation,” Borenstein said. “They are taking water to their mill.”
Governor Newsom made calculations that this is too much water for the oil industry’s mill.
PBF Energy Corporation reported earnings 1,800 percent higher than last year; Phillips 45 of 1,400 percent higher than last year; Marathon 450 and Valero 400 percent greater than last year; Exxon earned more than $19,700 million, Chevron $11,90 and Shell $9,450 millions.
Although the high price of fuel does influence the fact that the state establishes an additional tax to compensate the environment, that increase is insufficient for the rise in prices that has been seen this year.
The state Energy Commission lacks the authority to investigate the companies and determine the precise reason for the high costs to the consumer.
However Jamie Court, the executive director of Consumer Watchdog, explained that the price increases in the oil refining process to convert it into gasoline and mix with additives for cold months and for warm months.
In general terms, the refin The refineries in the state of California as a whole produce an amount that is equal to what is used by consumers, so if a refinery stops producing, it creates a deficit and leads to an increase in prices.
The state has watched that process and the California attorney general has already warned the corporations, which own the refineries, that they may face penalties and urged potential witnesses to denounce.
“I want to warn refiners not to take advantage of market disruption. My office is currently litigating multinational companies SK Energy Americas and Vitol for anti-competitive conduct, and we are closely monitoring the market and will not hesitate to take action against others if they violate the law,” prosecutor Rob Bonta said in March.
Now in the meeting next Monday, the legislature will decide the type of sanctions that California can apply to speculators with the refineries and the price of fuel.