“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:
Crude oil prices are down. Oil industry profits are up. Yet… gas prices in CA have increased by record amounts. It doesn’t add up.
We’re calling for a windfall tax so these profits go back to Californians paying for this oil company extortion. pic.twitter.com/FTAfXmOpAU
— Office of the Governor of California (@CAgovernor) September 30, 2022
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.
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.
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