Marathon refinery
The Marathon refinery in Los Angeles. Courtesy of the company

As Californians see a renewed spike in gas prices, Gov. Gavin Newsom called Friday for a windfall tax on oil companies that would go directly back to California taxpayers.

While crude oil prices are down, oil companies have increased gas prices in California by a record 84 cents per gallon in the last 10 days. By contrast national rational prices increased by just a few cents during the same period.

At the end of August, crude oil prices were roughly $100 per barrel, and the average gas price in California was $5.06. Now, even though the price of oil has decreased to around $85 per barrel, the average gas price at the pump has surged to $6.29, according to the Governor’s office.

“Crude oil prices are down but oil and gas companies have jacked up prices at the pump in California. This doesn’t add up,” said Newsom. “I’m calling for a windfall tax to ensure excess oil profits go back to help millions of Californians who are getting ripped off.”

Industry observers blame the spike on a temporary lack of refinery capacity on the West Coast.

“A string of planned and unplanned refinery maintenance issues has severely tightened fuel supply in California,” said Doug Shupe of the Automobile Club of Southern California. “West Coast fuel inventories are at the lowest level in about a decade according to Energy Information Administration.”

“Until the refineries are fully operational again, supply is going to be tight and will cause pump prices to be volatile,” Shupe said.

Newsom directed the California Air Resources Board to make an early transition to winter-blend gasoline. This change is expected to immediately increase oil supplies by up to 10% and drop gas prices.

State Senate President pro Tempore Toni G. Atkins of San Diego and Assembly Speaker Anthony Rendon of Lakewood praised Newsom’s announcement and promised to “look at every option to end the oil industry profiteering off the backs of hard working Californians.”

“A windfall profits tax that takes excessive profits out of the hands of Wall Street and puts money into the hands of consumers deserves strong consideration by the Legislature,” they said in a joint statement.


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Ellen Bullock