Consumer Group Claims California Refineries Exploiting Ukraine Crisis

The Marathon refinery in Los Angeles. Courtesy of the company

San Diego drivers are paying high prices in part because of “unprecedented profits from refining oil into gasoline” in California, a consumer advocacy group charged on Wednesday.

Consumer Watchdog, based in Los Angeles, said recent earnings reports show refineries operating in California have exploited rising world oil prices.

“These profit reports show the Golden State Gouge is real,” said Jamie Court, president of Consumer Watchdog. “Oil refiners exploited the crisis in Ukraine to make a mint from California drivers.” 

In the San Diego region, motorists are paying around $5.81 cents per gallon now, according to GasBuddy.com. A year ago it was $4.11 a gallon.

The oil industry, through a spokesperson at Western Petroleum Association, has consistently claimed that Californians pay more because of taxes and environmental standards.

But Court said first quarter profits for oil companies show “California is nothing more than an ATM for oil refiners.”

Consumer Watchdog cited reports from refiners that their “crack spreads” — the difference between the price of crude oil processed and petroleum products sold — have risen substantially since the end of last year. The reports showed increases of around $10 per barrel in the first quarter.

Court claims California’s refineries are making more by raising their prices to reflect world crude oil costs despite using oil purchased and delivered before the latest run up in prices.

Currently there is proposed legislation under Senate Bill 1322 that would require every California oil refinery to report their “barrel profit margins” on a monthly basis.