Tesoro posts record California profits after price spike

According to Consumer Watchdog, analysis of Tesoro's second quarter earnings showed that the company made more California refining profit in 2Q15 than any other period in the company's history. Based on the number of barrels the company refined in California, and the profits they made from each barrel, Consumer Watchdog calculates that the company's 2Q15 California refiner profits were a record high of US$668 million, dwarfing its prior record of US$415 million in 2Q07. This number is four times higher than the company’s average California profit since 2005 of US$138 million.

The company's per barrel California profits (found by subtracting per barrel margin from per barrel costs), rose to US$14. In 2Q14 the company made just US$5.50/bbl. Since 2005 the company averages US$6.80/bbl California profits.

"Tesoro's record profits shows the pattern of gouging that Chevron and Valero demonstrated in their profit reports,” said Consumer Watchdog's Cody Rosenfield. “This is just more impetus for the legislature to act or for citizens to take matters into their own hands."

Businessman and philanthropist Tom Steyer joined Consumer Watchdog at a press conference on 5 August to call for reform of the California refining industry. "I am calling on the Legislature to address this problem,” said Steyer. "We have to protect Californians from these gigantic and unprecedented gas hikes."

Steyer called for legislation or a ballot initiative that would:

• Require oil companies to fully disclose the profits they make from refining gasoline in California, and the amount of taxes they pay to the state of California.
• Require oil refiners in California to give the public advance notice of planned maintenance and outages at their oil refineries.
• Require oil companies to have a plan to maintain a minimum level of gasoline reserves in order to prevent price spikes.
• Increase the legal and financial penalties for oil companies if they illegally conspire to increase gas prices.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.hydrocarbonengineering.com/refining/07082015/tesoro-posts-record-california-profits-after-price-spike-1255/