<script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-1244273282732907" crossorigin="anonymous"> Newsom calls special session on taxing excess oil profits - usanewsmart
Newsom calls special session on taxing excess oil profits

Newsom calls special session on taxing excess oil profits

Gov. Gavin Newsom on Friday announced he is calling a special legislative session in December for lawmakers to consider passing a tax on excessive profits oil companies are making because of the spike in California gas prices.

Newsom said he is working with the leadership of the Democratic-controlled Legislature to determine the best way to tax the profits and return that money back to Californians getting stung every time they fill up their gas tanks.

“This is just rank price gouging. They can get away with it,” Newsom told reporters during a news conference in Sacramento. “They’re taking advantage of you, every single one of you, every single day. Hundreds of millions of dollars a week they’re putting in their pockets, lining their pockets at your expense, and then polluting this planet and leaving us all the external reality and costs associated with that.”

Newsom said there is no logical explanation about why gas prices in California are $2.50 a gallon higher than the national average. He dismissed speculation that it was due to refineries in the state undergoing maintenance, calling that “nonsense” because the work at oil plants occurs every year without causing such a major price disparity between California and the rest of the nation.

At least five plants have recently faced maintenance-related stoppages or slowdowns, reducing supplies of California’s special blend of gasoline mandated to reduce pollution.

Unlike the nationwide increase in gasoline costs over the summer — driven by high oil prices and a surge in travel — the recent spike is unique to California and some of its Western neighbors, underscoring the fragility of the state’s transitioning energy markets.

Oil prices had a robust summer but had begun declining before OPEC+ announced plans this week to reduce output, which sent oil futures to their biggest weekly gain since March. West Texas Intermediate, the U.S. benchmark, jumped 4.7% to settle at $92.64 per barrel Friday. Brent crude, the international standard, rose 3.7% to settle at $97.92. Both are down from June, when futures contracts traded above $122 a barrel.

The summer’s high prices left oil companies swimming in profits, with Exxon Mobil and Chevron Corp. both reporting record income for the second quarter.

“We’re gonna get these every dollar, every cent, back in the pockets of those who were fleeced,” Newsom said. “It’s all about short-term profits, extracting money from people at a time of stress and inflation. I think that’s pretty damn disgraceful, and the question is for all of us is which side are we on?”

Times staff writer Nancy Rivera Brooks contributed to this report.

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