Why are gas prices so high? Don’t trust Big Oil’s answers
An industry-funded ad campaign places blame on California’s climate policies, rather than greed.
If you live in California you’ve probably run across ads blaming high gasoline prices on state laws and policies. They’re online, on television, in mailers, on highway billboards and even on gas pumps themselves. One of them asks in big, bold letters “why is our gas expensive” and directs you to a “facts per gallon” website that complains about government gas taxes and fees.
It’s all part of a multimillion-dollar ad campaign by the oil industry to deflect attention from its greed and shift blame for the nation’s highest gas prices onto California’s environmental policies. Oil companies want you to believe that what you pay at the pump has nothing to do with the recordhigh profits they’ve been raking in, but rather, is the fault of California’s leaders for trying to protect consumers, public health and the climate.
It’s just more misdirection from fossil fuel interests that want to keep profiting from a product that’s polluting our air and overheating the planet.
The oil industry contends that it’s unfairly blamed for high gas prices and that its ads are just an effort to get the facts out. But the “facts” are curated to mislead and exploit cash-strapped Californians’ economic anxieties to undermine environment- and consumer-friendly policies that some of the most powerful companies on Earth don’t like.
The industry is spreading these ads across the state because of new laws California has passed to take reasonable steps to protect consumers from price gouging, force more transparency about industry profits and emissions and end new drilling near homes and schools, a health protection the industry is trying to overturn through a referendum on the November ballot.
There’s a new watchdog division at the state Energy Commission that’s starting to look over petroleum companies’ shoulders to sniff out potential market manipulation. The industry sees a threat to its earnings and its opaque manner of doing business, so it’s fighting it tooth and nail.
Some of these ads are being paid for by the Western States Petroleum Assn., one of the state’s most powerful lobbying groups, and others come from closely tied industryfunded front groups, such as Californians for Energy Independence.
Their aim seems clear: to undermine these new laws that threaten to expose just what money-grubbing polluters and planetwreckers oil companies really are. It’s only the latest iteration in a years-long effort by the fossil fuel industry to sow disinformation about its environmental impacts and the transition to zero-emission technology that has included a campaign targeting California’s Latinos.
Here’s what you should know about gas prices so you aren’t fooled by Big Oil’s propaganda.
It is true that a portion of what Californians pay at the pump goes to state and local taxes and fees, which fund road repair, pollution reduction projects and other public benefits. But an even greater percentage of the per-gallon cost goes to the oil industry for refining, distribution and marketing and as profit, according to the California Energy Commission.
We don’t know exactly what all that money being sucked up by oil refiners, distributors and retailers is paying for because those details have long been shrouded in mystery. While some of it goes toward operating expenses, a good portion is pure profit, which surges when gas prices spike and flows into the coffers of Chevron, Valero and other oil companies.
It’s also unclear why Californians pay so much more for gas. In February, California’s prices were $1.35 per gallon higher than the rest of the country, and between 30 to 40 cents of that is what UC Berkeley economist Severin Borenstein calls a “mystery gasoline surcharge” that cannot be explained by higher taxes, fees or environmental standards,
But oil companies want you to believe they are struggling. The industry claims that the state’s six major oil refiners were losing an average of 31 cents per gallon by the end of last year, citing self-reported figures whose accuracy has been questioned by state officials. In fact, oil companies have been making a killing recently, posting some of their most profitable years ever while most Americans struggled to afford groceries, gas and other essentials.
So next time you see one of these ads, remember that oil companies want to keep reaping windfalls from the gas price spikes California is acting responsibly to curb even though they are worsening inflation and hurting consumers.
Californians should be wise enough to see this messaging for what it is: the behavior of a threatened, greed-driven industry trying to trick us into letting it hold onto its dirty and harmful old ways of doing business.