SAN FRANCISCO (KRON) — Californians are paying high prices at the pump, but many of us are wondering: why? According to the California State Transportation Agency (CalSTA), “Big Oil’s greed” is to blame.
On Tuesday afternoon, CalSTA tweeted out a graph which laid out a cost breakdown for a gallon of gas. The breakdown compared the cost of gas in late August to the prices reported on Oct. 6.
Over the five-week period, the price of crude oil went down dramatically, but the cost of gas continued to rise. The graph shows that one key part of gas pricing nearly quadrupled during the same time period: the cost of refinery and profit.
On Friday, California Governor Gavin Newsom announced his plans to call a special session of the state legislature to address high gas prices:
This is just rank price gouging. They can get away with it. They’re taking advantage of you, every single one of you, every single day. Hundreds of millions of dollars a week they’re putting in their pockets, lining their pockets at your expense, and then polluting this planet and leaving us all the external realities and costs associated with that.Governor Gavin Newsom
Not everyone agrees with Governor Newsom’s take.
In a letter sent to the California Energy Commission on Oct. 3, Valero’s Vice President of State Government Affairs, Scott Folwarkow, blamed California’s, “hostile regulatory environment” for the high prices, “California is the most expensive operating environment in the country,” he said.
Folwarkow argued that high gas prices are in part due to refineries shutting down from high operational costs in California, which decreases the supply of refined gasoline available in our state. Folwarkow also warned against further taxation or regulation of the gasoline industry by stating that any increased costs for refiners will simply be passed on to Californian consumers.
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The oil lobby also got in on the action. Western States Petroleum Association (WSPA) represents companies that account for the bulk of petroleum exploration, production, refining, transportation and marketing for five states in the west. WSPA released a statement before Governor Newsom’s announcement last week, calling his claims ‘misinformation.’
“California faces a supply shortage as a result of repeated irresponsible policy decisions that have led to a lack of investment in refining capacity and necessary infrastructure, making California an energy island,” said WSPA President and CEO Catherine Reheis-Boyd.
KRON4 reached out to Chevron, BP and Shell for comment on CalSTA’s tweet and data. BP and Shell did not return the message. Chevron referred our request for comment to the West Coast Petroleum Association. WCPA’s comment is shared in full below:
It was just over a month ago that the Governor and the legislature got together and imposed a series of mandates and regulations that will cost Californians a record $54 billion dollars. These are the types of actions that can drive consumer costs way up. A better use of a special session would be to take a hard look at decades of California energy policy and what they mean to consumers and our economy. Our industry is ready right now to work on real solutions to energy costs and reliability if that is what the Governor is truly interested in.