Newsom convenes special session on taxation of excess oil profits

Gov. Gavin Newsom announced on Friday that he is calling a special legislative session in December for lawmakers to consider passing a tax on the excess profits that oil companies make as a result of soaring gas prices in California.

Newsom said he’s been working with leaders in the Democratic-controlled Legislature to figure out how best to tax profits and return that money to Californians who get stung every time they fill up their gas tanks. .

“It’s just a ranking price hike. They can get away with it,” Newsom told reporters at a news conference in Sacramento. “They take advantage of you, each one of you, every day. Hundreds of millions of dollars a week that they put in their pockets, fill their pockets at your expense, and then pollute this planet and leave all the external reality and costs associated with that to us.

Newsom said there was no logical explanation as to why gasoline prices in California were $2.50 a gallon higher than the national average. He dismissed speculation that it was due to the state’s refineries undergoing maintenance, calling it “nonsense” because oil plant work takes place every year without causing such a price disparity between California. and the rest of the country.

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

Unlike the nationwide rise in gasoline costs over the summer — driven by high oil prices and an increase in travel — the recent spike is unique to California and some of its western neighbors, underscoring the fragility of energy markets in state transition.

Oil prices had a robust summer, but had started falling before OPEC+ announced plans to cut production this week, sending oil futures to their biggest weekly gain. since March. West Texas Intermediate, the US benchmark, jumped 4.7% to settle at $92.64 a barrel on Friday. Brent, the international standard, rose 3.7% to $97.92. Both are down from June, when futures were trading above $122 a barrel.

High summer prices left oil companies swimming in profits, Exxon Mobil and Chevron Corp. both of which posted record second-quarter revenues.

“We’re going to get every dollar, every penny out of the pockets of those who have been defrauded,” Newsom said. “It’s about short-term profits, extracting money from people in times of stress and inflation. I think that’s damn shameful, and the question is for all of us, which side are we on?

Times writer Nancy Rivera Brooks contributed to this report.

Los Angeles Times

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