Tax Oil Refiners’ Windfall Profits, Not Consumers, To Fix California’s Roads

This morning, Governor Jerry Brown penned another agreement with yet another country—Scotland—on combating climate change. Then he testified before legislative committees on behalf of SB1, his bill to raise gas taxes at the pump to pay for needed road repairs by $52 billion over ten years, and a Senate panel passed it

The gasoline that cars burn is a main contributor to the global warming that Brown seeks to combat. The companies selling that gasoline have consistently gouged California consumers for billions of dollars more than the rest of the country pays for gasoline. The money to fix the roads ought to be coming from windfall profits of big oil refiners that have consistently fleeced consumers at the pump. 

In 2015 alone, consumers paid $10 billion more than the rest of the country did for their gasoline. That year, the gap between state and national gas prices reached as much as $1.50 a gallon, according to a review of oil refiners’ quarterly reports submitted to the California Energy Commission’s Petroleum Market Advisory Committee by Consumer Watchdog. Prices skyrocketed at the pump in the wake of mismanagement that put two refineries offline.

Big refiners like Chevron, Tesoro, and Valero have used their windfall profits to fuel lobbying against a faster transition away from gasoline-powered cars.

Those lobbying dollars—and roughly $3.8 million in contributions from oil companies to Jerry Brown’s campaigns, causes, ballot initiatives, and to the state Democratic Party--helped kill off a provision in Brown’s 2015 bill increasing renewable energy generation that would have slashed the use of petroleum in cars in half. 


Lawmakers should tax some of the billions of dollars in windfall profits they have made recently at the pump.

 Governor Brown has consistently given the oil industry a pass while talking about the evil effects on the climate of the products they sell and signing more international accords to combat climate change.

Brown is letting the oil companies keep their ill-gotten gains while protecting them from taxation— including nixing an oil severance tax that lawmakers favored in 2014 that could have raised $1.5 billion a year in revenue.



Oil refiners continue to gouge Californians who are currently paying nearly 70 cents a gallon more than the $2.30 a gallon price in the rest of the country. It’s outrageous that the governor would continue to protect the oil industry at the expense of consumers by taxing the rest of us for road repairs when Big Oil can well afford to pick up the tab.

Big Oil has Californians over a barrel. Driving up gas prices still further at the pump for millions of California drivers is not the right course. Let the oil companies reimburse Californians by paying to fill in the gouges and the potholes. It’s only fair. 

Capitol Watchdog is owned and operated by nonprofit Consumer Watchdog. For more information about Consumer Watchdog visit http://www.consumerwatchdog.org

 
 

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