Battling Big Oil, Newsom Tears into Valero’s 500% Profit Increase Amid Soaring Gas Prices

California Governor Gavin Newsom said on Friday the 7th.  Oct. 2022 that he will call a special session of the state Legislature on Dec. 5 to pass a new tax on oil companies in response to high gas prices, speaking to reporters outside the California Natural Resources Agency in Sacramento, Calif. (AP Photo/Rich Pedroncelli)

Gov. Gavin Newsom speaks to reporters outside the California Natural Resources Agency on Oct. 7, as he announced he will call a special session of the state Legislature to consider a new tax on oil companies in response to high gas prices and soaring profits. (Rich Pedroncelli/Associated Press)

Gov. Gavin Newsom on Tuesday took aim at Valero Energy Corp.’s “record profits” this year as gasoline prices rose, escalating his battle with the powerful oil industry.

In a statement, Newsom renewed his call for a price cap penalty “to put these profits back into the pockets of Californians.”

Valero’s third-quarter financial report showed the San Antonio company earned $2.82 billion from July to September, Newsom noted, up more than 500% from its reported profit of $463 million in the same quarter last year.

“These gains came amid a record increase in gas prices for consumers during this period, despite the decline in crude oil prices,” Newsom said.

Valero reported $4.7 billion in profit for the second quarter of 2022, up 2,801% from a year earlier, and the company has earned $8.3 billion so far this year, he said.

“Big Oil is ripping off Californians, driving up gas prices and making record profits,” Newsom said. “When Valero increased its profits by over 500% in just one year, Californians paid for it at the pump instead of giving up those savings.”

Other oil companies are expected to publish their third-quarter earnings reports in the coming weeks.

The governor said he has taken action to lower prices by ordering a switch to winter blended gas and demanding accountability from oil companies and refiners doing business in the state.

Newsom’s office credited his actions with contributing to an 11% reduction from California’s record high of $6.42 per gallon to $5.71.

According to the nonprofit Consumer Watchdog, Valero’s profits in western regions, which come from its California refineries, exceeded 60 cents a gallon.

“It’s only the second time it has reported such a windfall above 50 cents per gallon since 2001,” Consumer Watchdog said. “The first time was the second quarter of 2022, when California profits were 83 cents per gallon. Once again, Valero’s California profits were higher than any of the other regions in the country and the world.”

This month, Newsom announced that he was calling a special legislative session on Dec. 5 for lawmakers to consider passing a tax on excessive profits that oil companies have raked in due to the rise in California gas prices.

The governor said he was working with leadership in the Democratic-controlled Legislature to find the best way to tax the profits and return the money to Californians who get stung every time they fill up their gas tanks.

“This is just ranking of awards. They can get away with it,” Newsom told reporters at the time. “They take advantage of you, every single one of you, every single day. Hundreds of millions of dollars a week they pocket, line their pockets at your expense, and then pollute this planet and leave us with all the external realities and costs associated with the.”

Spokespeople for Valero did not respond to a request for comment Tuesday.

This story originally appeared in the Los Angeles Times.

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