Newsom’s post on Chevron profits backfires as state data shows taxes exceed oil profits per gallon
A social media post on X from the press office of Gavin Newsom added fuel to the debate over California’s high gas prices, declaring, “While America suffers, Chevron profits.” The statement quickly drew scrutiny after receiving a community note citing California’s own energy data.
According to the note, “The State of California collects more in taxes per gallon of gasoline than refineries such as Chevron, Shell or Valero collect in profit per gallon,” undercutting the narrative that oil company profits are the primary driver of high prices.
USOGA pushes back on Khanna’s blame of Middle East conflict
The U.S. Oil & Gas Association also weighed in, sharply criticizing Ro Khanna for linking rising gas prices to tensions involving Middle East. Khanna argued that “Trump’s immoral and reckless war in Iran has shot up gas prices in my district to nearly $6 a gallon,” pointing to global conflict as the main cause.
USOGA rejected that argument, saying California’s policies; not geopolitics; are largely responsible for the state’s persistently higher fuel costs.
In a direct response, USOGA President Tim Stewart wrote, “High gas prices in your district aren’t ‘Trump’s war’ — they’re Sacramento’s doing.” He argued that California drivers face a heavy stack of taxes, environmental mandates, and regulatory constraints that significantly inflate prices.
The group estimates these state-driven costs add between $1.00 and $1.78 per gallon above the national average.
Breakdown of California’s higher gas costs
California’s gasoline prices are driven by both national and state-level factors. About 45% of the price reflects global crude oil costs and federal taxes, which are consistent nationwide.
The remaining 55% comes from California-specific costs, including higher refining and distribution expenses, environmental programs, and state and local taxes layered on top of the base price.
A key contributor is California’s unique, cleaner-burning gasoline blend, which adds roughly 10–15 cents per gallon and can only be produced by a limited number of refineries.
Higher labor costs, energy expenses, and stringent environmental regulations further increase the cost of producing and distributing fuel in the state.
Windfall profits tax debate resurfaces
Khanna has called for a windfall profits tax on oil companies, urging lawmakers to “pass my windfall profits tax on Big Oil to give Americans a rebate for their gas bills.”
USOGA pushed back, arguing that such policies historically reduce domestic production and ultimately lead to higher prices for consumers.
The group pointed to the 1980 federal windfall profits tax, arguing it reduced U.S. oil production, increased reliance on imports, and generated less revenue than expected before being repealed.
“Your proposed windfall profits tax will do nothing to bring relief,” Stewart wrote, warning it would repeat past policy mistakes.
Refinery closures tighten supply
California has lost nearly 20% of its refining capacity after two major refineries shut down in recent years, tightening supply in an already constrained market.
This reduction increases the risk of price spikes, especially during outages or periods of high demand.
With declining in-state refining capacity, California increasingly relies on overseas refineries, particularly in Asia, to produce its specialized fuel blend.
Shipping fuel across the Pacific adds time, cost, and exposure to global supply disruptions, increasing volatility for California drivers.
No evidence of price gouging after investigations
Despite years of accusations from state leaders, investigations have found no evidence of illegal price gouging by oil companies. Instead, officials point to structural factors such as taxes, regulations, and supply constraints.
Industry leaders argue that profit caps and increased oversight risk discouraging further investment in California refining.
California operates as an “energy island,” with limited pipeline connections to other states. This isolation makes it harder to quickly import fuel during shortages, amplifying price swings.
As a result, local disruptions can have an outsized impact on gas prices compared to other parts of the country.
Energy policy clash reflects broader debate
The escalating dispute underscores a broader divide over energy policy, with Democrats emphasizing corporate accountability and consumer relief, while industry groups advocate for increased domestic production and fewer regulations.
As California drivers continue to face the highest gas prices in the nation, the clash between state leaders, federal lawmakers, and the energy industry shows no sign of easing.
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14 essential strategies to maximize your Social Security and avoid costly mistakes
Social Security is a vital lifeline for many seniors, providing crucial income support during retirement. With inflation at its highest in four decades, Social Security’s inflation-adjusted benefits offer protection against rising costs.
Rising interest rates have disrupted many retirement portfolios, causing bond fund values to plummet. In this volatile financial landscape, Social Security can stabilize a typical stock-bond retirement portfolio. By implementing smart strategies, retirees can maximize their Social Security benefits and ensure a more secure financial future.
14 Essential Strategies to Maximize Your Social Security and Avoid Costly Mistakes
11 reasons you should claim Social Security early
Deciding when to claim Social Security is often about maximizing your benefit. Financial planners usually advise delaying your claim for as long as possible to secure the highest monthly payment. Your benefit is based on your lifetime earnings, with a full payout available at your full retirement age (FRA), which is currently between 66 and 67 depending on your birth year. Claiming before FRA results in a permanent reduction in your monthly benefit, while waiting beyond FRA leads to a permanent increase. However, the decision isn’t solely about maximizing the monthly check. Personal factors such as health, family circumstances, and financial needs can play a significant role in determining the right time to claim.
11 Reasons You Should Claim Social Security Early
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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