Consumer Watchdog Says CA Senate Passage of Minimum Inventories Bill Is A Victory For People's Wallets Over Oil Refiners' Excessive Profits
SACRAMENTO, Calif., Oct. 11, 2024 /PRNewswire/ -- Consumer Watchdog said the California Senate's passage today of Assembly Billx2-1 is a victory for all California drivers who could save $1 billion or more per year by avoiding gasoline prices spikes driven by inadequate inventories when refineries go down.
"The legislature has stood up to the four oil refiners that make 90% of our gasoline and said decisively California will no longer be suckers and fall prey to the same old game of price spikes driven by inadequate inventories and refinery maintenance," said Jamie Court, president of Consumer Watchdog, whose testimony for the proposal explained how the lack of inventories have driven recent price and profit spikes. "Requiring resupply arrangements is not rocket science, nor does it mean refineries that need maintenance won't get it, it's simply planning to avoid the price spikes that cost drivers an extra $2 billion at the pump in 2023. The state shouldn't have to require it, but the oligopoly of refiners have taken advantage of their market power to short the market and pump up their profits to obscene levels."
The Division of Petroleum Market Oversight found oil refiners made more than $2 billion in excessive profits from price spikes during July through September 2023. California Energy Commission Vice Chair Siva Gunda gave testimony at an Assembly hearing that the proposal will cost refiners no more than $25 million for refiners to maintain the added inventories and would likely result in potential savings of half the cost of the price spike, $1 billion or more.
Unions Defend Refiner Profits In Legislator Letter
Consumer Watchdog called out Chevron and some of their allied unions for the misinformation they have been propagating.
"Chevron and some of the trade union leaders have outright lied to legislators about this simple proposal in order to justify these refiners' outrageous profits," said Court, pointing to a letter sent last night to legislators by allied trade union heads.
In the letter, the union heads argue, "Our members do not have work unless these projects turn a profit. It should not be deemed villainous to operate legal and needed industries that turn a profit for shareholders, especially when they employ hundreds of thousands of Californians and contribute billions of dollars in tax revenue supporting essential state and local workers and services across the state. These same companies spend millions of dollars annually supporting local food pantries, Little League teams, and local businesses, all of which benefit our members in their communities. Profit should not be a dirty word in California or elsewhere. Profit employs our members and allows them to feed their families."
"Profits are one thing, but the type of obscene level of profits refiners make from price spikes in California is what this proposal guards against," said Court. "Shame on these union heads for pimping for the refiners that are ripping off their members at the pump in pursuit of outrageous profit for their shareholders."
Consumer Watchdog published a short "Consumer Alert" video on the issue.
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SOURCE Consumer Watchdog
