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Cinnamon

California oil refineries' gross profits nearly double in 2015

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Los Angeles drivers shelled out more than $4 a gallon at the pump in recent weeks, the state's oil refineries pocketed record amounts of money — as much as $1.17 a gallon in gross profits.

From Jan. 1 to July 6, oil refineries almost doubled the typical amount they collect on a gallon of gasoline, state data show.

California refineries reaped an average of 49.3 cents on a gallon of gasoline from 1999 to 2014, according to the California Energy Commission. But this year, the average ballooned to 88.8 cents, triggered when refinery troubles in February disabled 7% of the state's capacity at a time of low inventories.

With oil prices falling, refinery costs stable and gasoline prices soaring in California, refineries are experiencing a boom in profits.

 
 

"Is it unusual? Absolutely," said Gordon Schremp, a senior fuels specialist at the California Energy Commission. "They are making more money. And yeah, consumers are, unfortunately, having to pay significantly more."

In May alone, the state's fuel-making companies took in a record high of $1.17 a gallon at the refinery level, according to an analysis of the commission's data by the advocacy group Consumer Watchdog, set to be released Wednesday.

The commission's gross profit statistics for refineries, called "refiner margin," represent a mixture of costs and profits at the state's 11 fuel-producing plants. Because refiners don't reveal their costs or earnings in the state, the energy commission approximates local profits by subtracting the cost of oil as well as taxes, distribution and marketing from the retail price of gasoline.

 

On July 6, for example, the state's average retail price for name-brand gasoline was $3.432 a gallon, according to a weekly survey by the U.S. Department of Energy. Of that, $1.36 represented the cost of crude oil; 32.6 cents was attributed to distribution and marketing costs; 58 cents went to taxes and fees — leaving $1.166 in refiner gross profits.

The refiner margin doesn't represent a net income figure reaped by the refiners, but it indicates the rise and fall of those firms' profits.

And the profit increase has left motorists unhappy.

At a Shell gas station in Boyle Heights, where a gallon of regular gas was $4.77 with cash payment, Natalia Montes said she has little choice but to pay the higher gas prices.

"I don't know why it's so expensive if they're making a profit," said Montes, 19. "I can't go out every weekend because I feel like I'm wasting gas," she said.

Jamie Court, president of Consumer Watchdog, called on lawmakers and Gov. Jerry Brown to "deter this type of gouging by establishing a windfall profits tax and forcing refiners to open their books and justify their inventories, refinery outages and profits."

<snip>

http://www.latimes.com/business/la-fi-gas-profits-20150722-story.html#page=1

So they don't have to open their books? Why not? Everyone else has to open theirs! $4.77 a gallon in L.A. and oil is $49.12 per bbl right now.

 

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Makes you wonder if they are trying to suck all the profit they can out of the oil industry because they know they have passed peak oil, and that with demand growing we will reach the end of our oil supplies on this planet within the next ten to twenty years.

Saudi oil used to be light and recently  it is heavy crude. Research says, water contamination, microbe degradation or the residue of formally light oil. In my terms they is scraping the bottom of the barrel.

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