In battle with Big Oil, Newsom rips into Valero's 500% rise in profit amid soaring gas prices

California Gov. Gavin Newsom said on Friday, Oct. 7, 2022, that he will call a special session of the state Legislature on Dec. 5, to pass a new tax on oil companies in response to high gas prices, while talking to reporters outside the California Natural Resources Agency in Sacramento, Calif. (AP Photo/Rich Pedroncelli)
Gov. Gavin Newsom speaks to reporters outside the California Natural Resources Agency on Oct. 7, when he announced that he will call a special session of the state Legislature to consider a new tax on oil companies in response to high gas prices and soaring profits. (Rich Pedroncelli / Associated Press)
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Gov. Gavin Newsom on Tuesday took aim at Valero Energy Corp.'s "record profits" this year as gasoline prices soared, escalating his battle with the powerful oil industry.

In a statement, Newsom renewed his call for a price-gouging penalty "to put these profits back in the pockets of Californians."

Valero's third-quarter financial report showed that the San Antonio company made $2.82 billion from July to September, Newsom noted, up more than 500% from its reported earnings of $463 million in the same quarter last year.

"These profits came amidst a record gas price hike on consumers during that time period, despite crude oil prices having gone down," Newsom said.

Valero reported $4.7 billion in profits for the second quarter of 2022, a 2,801% increase from a year earlier, and the company has made $8.3 billion so far this year, he said.

"Big Oil is ripping Californians off, hiking gas prices and making record profits," Newsom said. "As Valero jacked up their profits by over 500% in just a year, Californians were paying for it at the pump instead of passing down those savings."

Other oil companies are expected to release their third-quarter earnings reports in the coming weeks.

The governor said he has taken action to lower prices by ordering a switch to winter-blend gas and demanding accountability from oil companies and refiners that do business in the state.

Newsom's office credited his actions with contributing to an 11% reduction from California's record peak of $6.42 a gallon to $5.71.

According to the nonprofit Consumer Watchdog, Valero's western region profits, which come from its California refineries, exceeded 60 cents a gallon.

"That is only the second time it has reported such a windfall of over 50 cents per gallon since 2001," Consumer Watchdog said. "The first time was the second quarter of 2022, when its California profits were 83 cents per gallon. Valero’s California profits were once again higher than any of its other regions in the country and the world."

This month, Newsom announced he was calling a special legislative session Dec. 5 for lawmakers to consider passing a tax on excessive profits oil companies have been raking in because of the increase in California gas prices.

The governor said he was working with the leadership of the Democratic-controlled Legislature to determine the best way to tax the profits and return that money 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 at the time. "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 realities and costs associated with that."

Valero spokespeople did not respond to a request for comment Tuesday.

This story originally appeared in Los Angeles Times.