Refining company PBF Energy Inc. has denied a request by California’s energy regulators to testify at a hearing on gasoline price spikes next week, citing Gov. Gavin Newsom’s “politicizing of this issue” and failure to issue a year-long warning about the state’s fuel supplies note.
In a letter to Newsom, the refinery said it would only provide written comments to the California Energy Commission given the governor’s approach to the issue and what the company called “misleading information” about third-quarter earnings results. “Refining is an extremely capital-intensive business,” PBF said, and “California’s regulatory environment threatens future investments in refining and fuel manufacturing in the state.”
Marathon Petroleum Corp. also declined to testify, saying it had concerns about sharing information under federal antitrust laws. Phillips 66 cited the same concern, instead recommending testimony from the Western States Petroleum Association, which has volunteered to represent invited refiners and attend the hearing.
“It’s not surprising that oil companies are dodging questions about their record profits while Californians are paying the price at the pump,” said Alex Stack, a Newsom spokesman. “California’s have been held hostage by the oil industry and the gas prices they charge us, and now that we’re asking them to answer basic questions, they won’t show up.”
The scheduled hearing comes amid persistently high gasoline prices in California, where the average for a gallon of unleaded gasoline was $5.157 on Wednesday, according to the AAA. Newsom singled out PBF, accusing oil companies of being “greedy” and making “record high profits.”
PBF is on track to post nearly $3 billion in earnings this year, according to the median of analyst estimates compiled by Bloomberg. But like other oil companies, recent gains come after outages during the pandemic, when fuel demand collapsed and refiners lost billions. For example, PBF’s $1.4 billion loss in 2020 wiped out all previous annual profits accumulated since 2012 and brought the company to the brink of bankruptcy. Now, the company said in its letter to Newsom, it is using 2022 profits to pay off “the exorbitant debt” it incurred to survive the pandemic lockdown.
In previous meetings and correspondence with California officials, PBF warned that the state is on track to lose 20% of its 2019 gasoline production by 2023 — though demand is only expected to fall 8% — amid a refinery shutdown, halting gasoline production at a Phillips 66 plant and questioned crude oil imports.
–Assisted by Gerson Freitas Jr.