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Government Is The Benefactor From The Sale Of Fuel, Not The Oil Companies – OpEd

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Drivers should be aware of the reality that every time they add 16 gallons of fuel to their vehicle, that $1.30 a gallon is contributing $20 per tank to government programs.  Where is the accountability for these programs?

California Governor Newsom should look in a mirror and not bite the hand that feeds the State, as consumers are contributing more than $75 million dollars a day, or more than $27 BILLION dollars a year, from the fuel consumption of the states ‘mobile fleet.

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The estimated impact of California taxes, fees, and costs for climate programs, are a whopping $1.30 a gallon:

Drivers should be aware of the reality that every time they add 16 gallons of fuel to their vehicle, that $1.30 a gallon is contributing $20 per tank to government programs.  Where is the accountability for these programs?

California drivers paying $6.50 a gallon are contributing 20 percent of the tab for each gallon to the government. If and when the cost of crude oil ever comes down, gasoline may get back to $4.00 a gallon, then the government’s share is a whopping more than 30 percent for each gallon.

Even more pain at the pump  just occurred for Californians under Senate Bill 1, enacted in 2017, the State Excise Tax amount is raised every year, in part to keep pace with inflation. The programmed annual gas tax hike occurred on 1 July 2022, with an increase of 5.6 percent, which takes it to 53.9 cents per gallon, a jump of 2.8 cents.

According to the California Energy Commission there were 29 million registered vehicles in California in 2015. The fuels consumption on a daily basis for California’s mobile fleet was 48 million gallons per DAY of gasoline and 10 million gallons per DAY of diesel.  A total of 58 million gallons of fuel daily.

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With California collecting $1.30 per gallon for taxes, fees, and costs for the states’ climate programs, those 58 million gallons of fuel being consumed daily is more than $75 million dollars a day or more than $27 BILLION dollars a year for government spending pleasures. 

So, who is the real profiteer from fuel sales? Yes, it’s the government.

Governor Newsom is doing everything possible to rid California of oil, from his continuous efforts to reduce in-state oil exploration, and his mandate to not purchase internal combustion engine vehicles starting in 2035. Since he won’t be around in 2035, he remains silent about what new taxes would be needed to replace the billions of dollars that will be diminishing from the coffers as fuel consumption decreases with his mandate to buy EV’s.

California Governor Newsom recently asked the California Energy Commission to investigate fuel costs. Following Newsom’s request for an investigation by the state attorney general to investigate fuel costs, California Democrats to Investigate Cause of High Gas Prices.

As a result of the lack of transparency as to why Californians are paying more than a dollar a gallon for fuel than the rest of the country, I met Senator John Moorlach a few years ago in 2018 and he sponsored a bill, Senate Bill 1074 (John Moorlach) called “Disclosure of government-imposed costs,” which would have required gas stations to post near each gas and diesel pump a list of all those cost factors, all taxes, as well as the costs associated with the state’s numerous environmental regulations being imposed on the manufacturers. 

Back in 2018 both the Senator and I testified in support of the Bill for transparency of government-imposed costs, at a hearing before the State Senate Finance Committee. The Democrat controlled committee was adamant they did not want the public to see all the costs included in the posted pump price, and killed the Bill  from future consideration that would have made gas pricing transparent to the buyer. Today, we are hearing the same concerns that Senate Bill 1074 (Moorlach) would have remedied. Today, the dance continues.

On a national basis as a historical perspective, from Investor’s Business Daily article (2008) noted in Mark Levin’s book Liberty and Tyranny.  From 1977 to 2004, according to Tax Foundation data, US oil companies cleared $630 billion after taxes while paying $518 billion in federal and state corporate taxes at an average rate of 45%. Over the same period, an additional $1.34 TRILLION in excise fuel taxes was collected from consumers by the oil companies and turned over to various governments

It’s embarrassing that the same California Democrats that were adamantly against transparency of all the costs dumped onto the posted prices at the pump, are now seeking profit transparency from California oil refineries as to why California’s gas prices are consistently the highest in the country. It’s time to turn the mirror around at the Governor and Sacramento.

In the last few years, California has shuttered two refineries (Phillips66 at Rodeo and Marathon at Martinez) that once manufactured many products, are now only focusing on renewable diesel. If the courts uphold the recent Bay Area Air Quality Management (BAAQMD) rule for a further reduction in particulate emissions, both the Chevron Refinery at Richmond and the PBF Refinery at Martinez have stated that they will shut down before spending one billion dollars to retrofit their refineries to comply with further particulate emissions. With the potential loss of two more refineries, Northern California’s gasoline and jet fuel to supply military bases, major airports in San Francisco, Oakland, San Jose, and Sacramento will be imported from China, along with many other products that shuttered California refineries are no longer manufacturing.

We need transparency and accounting of all government costs dumped onto the protested price at the pump, not an investigation of the diminishing number of suppliers. Governor, California taxpayers deserve an explanation.

 

Ronald Stein

Ronald Stein, Founder and Ambassador for Energy & Infrastructure of PTS Advance, headquartered in Irvine, California.

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