Home>Articles>Gov. Newsom Calls for Tax on ‘Windfall Profits’ on Oil Companies After Abandoning Gas Tax Pause

California Governor Gavin Newsom (then Lieutenant Governor) riding in the Golden State Warriors Parade in Oakland, CA, Jun. 12, 2018. (Photo: Amir Aziz/Shutterstock)

Gov. Newsom Calls for Tax on ‘Windfall Profits’ on Oil Companies After Abandoning Gas Tax Pause

Says he’s returning profits to Californians after passing ‘sweeping climate change’ bills further restricting oil and gas extraction

By Katy Grimes, October 3, 2022 8:17 am

“Crude oil prices are dropping, but oil and gas companies are still raising prices on California consumers,” California Gov. Newsom said, announcing a new “windfall profits tax” on oil companies. “These price hikes cannot be attributed solely to refinery maintenance issues, hurricane disruptions, or even state taxes,” Newsom said.

“Gas prices have increased by a record $0.84 per gallon in just over one week,” the governor said.

In a video, Gov. Newsom addressed the $2.50 difference between California’s highest-in-the-nation gas prices, over $7.00 in some California locations, and the rest of the country. “This degree of divergence from the national prices has never happened before. And oil companies? They provide no explanation. The fact is, they’re ripping you off,” he said. “Their record profits are coming at your expense.”

Newsom left out of his video the part where in 2021 he largely killed hydraulic fracturing for natural gas in California as part of his overall plan to end oil extraction. He also announced his action to halt issuance of fracking permits by 2024.

Gov. Newsom just signed a package of “sweeping legislation” in September to achieve statewide carbon neutrality as soon as possible, and no later than 2045, by establishing an 85% emissions reduction target, capping oil wells, slowing oil and gas permitting, making it impossible to increase refining capacity, and entirely phasing out oil and gas starting in two years. And that’s just the start.

In addition to California’s gas taxes, state regulations create a more demanding and exacting process on oil and gas as well. And the governor and Legislature ramp these up annually.

Watch the video:

The overall goal of Newsom’s “sweeping” climate change package is “Achieving net zero GHG emissions” in the state, and that means outlawing oil and gas. So pretty much everything we use in modern society needs to be upended, overhauled, and restricted, according to the Gov. Newsom and the burgeoning industry of climate change hustlers.

Yet, when the California Legislature had a chance to halt increasing California gas tax increases, they didn’t. Nor did the governor. In March, the Assembly Transportation Committee was set to hear AB 1638 by Assemblyman Kevin Kiley, to suspend California’s .51 cent gas tax (CA gas tax is now .54 cents). Kiley noted that Maryland and Georgia had just reduced their gas taxes, and the people of those states saw immediate results. He said rebates are a good idea, especially with a substantial state surplus, and should be much larger, returning to overtaxed tax payers more of their own money.

“Newsom and the Legislature are officially out of excuses and need to enact my bill immediately,” Assemblyman Kevin Kiley (R-Rocklin) Tweeted in March.

However, legislative antics and partisan politics won the day. Rather than debating the proposal to suspend the summer gas tax increase, Kiley’s bill was hijacked by Democrats who passed amendments to gut the bill so they could not be accused of voting for the gas tax increase.

Chevron gas prices, Sacramento, CA 9/29/2022. (Photo: Katy Grimes for California Globe)

Democrats diddled for 100 days to provide relief at the pump for the state’s drivers from the record high gas prices,” the Globe reported in June. California Democrats abandoned the opportunity for a gas tax holiday, and then announced they were forming a new committee to investigate gas price gouging to make it appear they were doing something.

Assemblyman James Gallagher (R-Yuba City) offered his retort with this: “Easy to read investigative report into how government is adding $1.30 to each gallon of gas in CA. Rather than launching a new ‘investigation,’ Governor Newsom and legislative leaders need to immediately suspend our state gas tax, which is almost 3 times higher than the federal tax.”

Kiley added: “A federal gas tax holiday would save drivers over 18 cents per gallon at the pump. If California suspended its gas tax as well, drivers would save an additional 51 cents for a total of nearly 70 cents per gallon in savings. The Penn Wharton Budget Model released last week shows “evidence that recent suspensions of state gasoline taxes in three states were mostly passed onto consumers.”

In June Kiley Tweeted this prophetic statement: “Democrat Legislators have written a strongly worded letter demanding an investigation into the ‘real’ causes of high gas prices. This is not satire.”

“Senate Republicans have been calling for gas tax relief for a year, and keeping the pressure on is paying off. Consumers are fed-up, and Democrats are scrambling to compensate with a ‘Hail Mary’ pass on gas tax relief, said Senate Republican Leader Scott Wilk.”

Wilk provided some of the policies implemented in California that drive up the cost of gasoline:

  • 51.1 cents – State gas tax (add an additional 3 cents starting July 1.)
  • 25 cents – Cap and Trade (estimate)
  • 22 cents – Low Carbon Fuel Standard (estimate)
  • 2 cents – Underground Storage Fee
  • 10-15 cents – California’s switch to summer-blend costs more to produce than other types of gasoline. Source.
  • 14.4 cents – State sales tax (estimate based on 6/20 average price)

Flash forward to October 2022, and Gov. Newsom is using sleight-of-hand, blaming oil companies for “windfall profits.”

Assemblyman Kevin Kiley (R-Rocklin) again addressed Gov. Newsom’s proposal to raise taxes on oil producers:

“Californians need immediate relief from soaring gas prices, which we can provide by passing my bipartisan proposal to suspend the gas tax. Instead, Governor Newsom wants to increase taxes yet again,” Kiley said. “The Governor’s tax hike will make matters worse, by restricting production and passing on costs to consumers in the form of higher gas prices. Californians simply cannot afford more backward policies.”

California’s average gas price hit $6.29 per gallon today, nearly $2.50 more than the national average. This is just 15 cents below the state’s record high of $6.44 set in June of this year and an increase of nearly 80 cents in the past week alone.

In January, Kiley introduced AB 1638, an urgency measure that would have immediately suspended the gas tax and saved Californian’s over 50 cents per gallon at the pump. That bill was rejected in the Assembly on multiple occasions. Instead of providing relief, the Speaker of the Assembly created the Select Committee on Gasoline Supply and Pricing to study the issue. To date, the committee has held two hearings and has yet to produce anything actionable.

And now energy giant Chevron Corporation will be moving the bulk of the company to Texas next year.

It may be October, but Gov. Newsom’s trickery isn’t fooling anyone.

Sign on EV charging station at 7-story parking garage near the CA Capitol 9/30/2022. (Photo: Katy
Grimes for California Globe)


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27 thoughts on “Gov. Newsom Calls for Tax on ‘Windfall Profits’ on Oil Companies After Abandoning Gas Tax Pause

  1. No Governor Climate Change it is you and the Democraps that are fleecing and ripping off the citizens of California. Prices were coming down for a while when FORMER VICE PRESIDENT biden started taking oil out of our Strategic Reserves and now they are down to 30%. Let’s hope we don’t get in a war because that is what those oil reserves are for. This whole mess of gas price hikes was not created by oil companies, IT WAS CREATED BY biden AND THE DEMOCRAPS!!! Get ready for $8 a gallon gas folks!

  2. CARB, AQMD, State Fire Marshal, the Ports, and numerous other small permitting agencies are making it time consuming and expensive to upgrade refineries and build infrastructure such as pipes, tanks, truck racks and other projects to improve the supply of gasoline and diesel. Many major petroleum industry projects have been proposed but are experiencing a slow death. Who wants to spend billions of dollars on a project when the sale of new cars using gasoline or trucks using diesel are in the process of being banned after 2035.

  3. I agree with both commenters, bad policy has led us to the highest gas prices in the nation.
    The windfall tax that Newsolini wants to impose could further hurt oil production and even increase gas prices. The consumer will not benefit, it will be the state.

    I urge all Californians to get out and vote for change! Retire Newsom and bring in Dahle who will bring common sense and sound business practices to Sacramento.

    1. Exactly, Cali Girl.
      Voters are going to vote for Dahle anyway just on the strength that Gruesome is simply NOT acceptable to continue as Gov, but check out Brian Dahle’s website and you’ll see he is a very fine and worthy candidate in his own right:

      1. Showandtell, I visited the site and even made a donation. But I looked at his plan for water and energy and it seems like he believes in “climate crisis” and supports “renewable energy”. Other than that he will get my vote and I look forward to him debating GCC.

        1. John, I know language that sounds anything like the ridiculous stuff that comes from the enviro fanatics is annoying if not crazy-making. But I’m pretty confident Dahle is all-around sensible on this. I saw under “Water” that he said “water crisis” and “climate change” (not man-made, a big difference). He might as easily have said “drought” (although I guess that’s up for debate too). I didn’t see “climate crisis,” though, which would have worried me a bit. I took the “renewable energy” reference to mean that there are all these huge solar arrays and wind farms already set up on desert lands but the desert greenies don’t want transmission lines to ruin their desert views. They want to have their cake and eat it too. So that’s a problem that needs to be corrected, since the solar/wind infrastructure is already there but with a dearth of transmission lines, as I understand it.

          Bottom line is he seems to be sensible on the water/energy issue. I think you would be happy with his stance if he were elected. Should any unforeseen wacky wild hairs pop up I think we could work with him. He wants to quickly approve oil drilling applications that have been sitting untouched and unapproved. He wants to manage and thin forests because the density is not only dangerous but sucks up precious water. He wants to go forward with building water storage infrastructure. And I personally heard him go strongly after Newsom for wrongly blaming “climate change” for the fire-nado-type wildfires in the forests of the past few years when, as Dahle pointed out, the issue has obviously been bad, neglectful forest management, and cleanup of the forest floors, and extreme cutbacks of logging. That told me more than anything what he thinks of so-called “climate change,” especially as a handy excuse for everything that goes wrong the way the greenies and their sycophant Newsom does. What’s more, Dahle is intimately and painfully familiar with the forest fire issue because his senate district has been devastated by it.
          I probably missed some stuff, even in my long-windedness, but I sure hope this helps.

          1. NOTE: I should have said “govt-and-Newsom-created drought,” because that’s what it actually is. 🙂

  4. Does a photo exist of Gruesome giving us the finger? If so, that’s what we should be seeing at the top of this article, because that’s what he is doing, just like the obnoxious, taunting 8-year-old bully on the playground he apparently uses as a role model. Anyone who does not see that Gruesome has NO CREDIBILITY LEFT AT ALL is a brain-dead zombie. Then he has the nerve to drag out the old “oil company extortion” blah-blah-blah? Really? Is that the best you can come up with Gavin? How embarrassing. Gavin’s policies and everything he has done are directly responsible for what Californians are suffering in every way. DUH! And now, to add insult to injury, he intends to send out MORE “rebate” checks to buy off voters before the upcoming election? What a clownish, annoying, arrogant, mirror-watching horse’s ass Gavin Newsom is.
    As you know.

    1. P.S. Notice how even the sign on the EV charging station (Katy Grimes’ photo above) is written in ‘Gavin-speak.’ Aaahhhhhh!

    2. Yes! Everyday he waves that finger at Californians! It might as well be a loaded gun. He has killed jobs, the elderly and small businesses.

      The worst Governor in my lifetime.

  5. Suspend the gas tax, instant relief (even temporarily), so people can breathe and prepare. EV charging stations are already obsolete, and certainly not supported by renewables. China has been building EV’s without batteries for two years, with subscription replacement batteries, a 5 minute turnaround. Trains from LA to San Diego have been halted as the ground is shifting under the tracks through San Clemente, so much for public transportation. Prepare your soul, God always provides. The world is shifting and there’s nothing Newsom can do to stop it.

  6. To parrot John & Nofearmfd, this is typical Democrat projection and gaslighting – they own all of these self-imposed “shortages” via their sellout to the CCP and the “green” cabal, who demand draconian changes to all of modern society, while China is the largest polluter AND beneficiary of all of the “green” infrastructure that will be required to fulfill Newsom’s wet-dream mandates of “renewable” energy sources within unrealistic timeframes…
    Or is this all part of destroying the economy so that the World Economic Forum’s “Build Back Better” plans will be more palatable to the masses, after they’ve had their lives upended by all these bad policies that are being dispensed in rapid-fire manner????

  7. so, the oil companies are only windfall profiting on California? Gas prices in Tennessee are almost $3.00 a gallon less than CALIFORNIA. I don’t think there are even any refineries there. Where does their lower cost gas come from.
    check the map at GasBuddy dot com. why is all the expensive gas on the left coast?

  8. Instead of cutting gas taxes or promoting oil production and refinery capabilities in California, Gov. Newsom and the Democrat cabal in the legislature would rather tax oil companies? The windfall gas taxes will just be passed on to consumers and it won’t reduce gas prices? Why would they do this? Maybe it’s because Democrat Gov. Newsom is one of Klaus Schwab’s World Economic Forum (WEF) globalist minions and probably so are many lawmakers in the legislature? No doubt any windfall gas taxes collected will go into the general fund to be squandered and distributed by the Democrat cabal to their cronies? It’s all part of the WEF globalist’s plan to destroy the USA, usher in their Great Reset, and establish a one world government?

  9. Kern County is over flowing with oil, so there is no shortage of oil and gasoline. To beat the Big Oil gasoline price rip-off, buy an EV.

    1. No shortage of oil here in Kern County, but Gavin signed a law to curtail drilling and production. This creates a shortage, driving up prices, making the Getty oil family smile.

    2. Buy an EV? Too bad you can’t charge it but it will “impress” your neighbors while it sits in your driveway. 😉

    3. Buy an EV? You mean the ones that cost 50% more than a gasoline car, and at the end of 10 years are ready for the junkyard, because it costs more to replace the battery than the car is worth? My electricity rates have doubled in three years. You think I am going to buy an EV?

      Big Oil isn’t the problem. BIG GOVERNMENT is the problem.

  10. Newsom is the worst governor we’ve ever had. He is an outright liar. There is no oil pipeline coming into California, so we have to import 55% of the oil coming into this state. Then add the ridiculous taxes, the regulations preventing new refineries, and you have expensive gasoline. Newsom and the Democrats want to shut down the remaining oil production in California. Am I living in the Twilight Zone? I can’t believe the stupidity of Newsom and the Democrats.

  11. Honestly people, GTFO of that God-forsaken s-hole. It’s done. I’m sorry to say it because it is beautiful and there are some decent folks but it’s death by 1,000 cuts.


  12. I can’t stand reading about Gavin at this point. Better tell everyone to get out and vote and NOT for him. He is the worst person in the world and the biggest narcissist!!! The climate can not be controlled by this jerk and we don’t want anymore ignorant bills signed by him The climate will do what it needs to do and it is not getting hotter. Gavin is destroying this beautiful state, how can people not see this? I am about done with this state if he continues to be a dictator. Thanks you to The Globe for always being honest in their reporting.

  13. Oh so this Cali hillbilly hang out, good to know. Everything spewed in this nonsense article and by all your bushwhacked commenting is just delusional at least, dangerous at best. Simple math skills will show you just how stupid every point y’ll tryin to make. Even with that laundry list above of additional SPECULATED taxes, still only adds up to about 1.30$, where’s your justification for the other 1.30$ PER GALLON we all paying at the pump RIGHT NOW?? That .84 cent increase was two weeks ago, I remember it happening literally on the Tuesday before Hurricane Ian hit Florida. So in a perfectly planned price gauge 48 hrs before it hit, they jumped prices .75-.90 cents at EVERY gas station I passed that day, I had passed on getting gas at my favorite station in the morning and when I went by the same station 6 hrs later, price had gone from 4.95$/gal to 5.75$/gal. NO green policies or other nonsense y’ll trying to deflect with justify a ONE DAY .80 cent price hike!! Is your ORANGE MESSIAH’s brainwashing so strong that you even willing to shelter and protect his greedy billionaire cronies?? Even if the state gov did remove the .51 cent gas tax, you think prices would drop .51 cents? we would be lucky to see even a .20 cent drop in prices, would just be another opportunity for these gas barons to squeeze even more profits. 2021 Chevron & Exxon had more than TRIPLE their profits from 2020. You can’t make this stuff up, they FACT, public corporate disclosures. OPEN YOUR EYES SHEEP!! Those refinery gates should be getting smashed down and their corporate offices stampeded by ALL fed up Californians being fleeced by these greedy gas barons….but alas, more tribal political mud slinging. And as a TRUE California INDEPENDENT, save all your commie, liberal mudslinging rebuttals, focus that vinegar on the oil CEOs.

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