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Sacramento is the biggest culprit causing high California gas prices
Dennis Wyatt new mug
Dennis Wyatt

California gas prices now average $6.40 a gallon and the state Legislature is outraged. So, the Assembly is going to get to the bottom of it. They’re going to launch an investigation. And there’s a perfect tool for finding the truth. It’s called a mirror.

No one is saying oil companies aren’t making money. They need to make money to drill for oil. They need to make money to refine oil. And they need money to cover the cost of California’s energy policies.

High California gas prices are not driven by profits. They’re driven by Sacramento. And it’s not all transparent.

Let’s start with a Sacramento invention called cap-and-trade. The state essentially taxes greenhouse gas producers. It spends the money on endeavors aimed at reducing greenhouse gases. Next fiscal year the revenue is pegged at $1.4 billion. It includes $487 million to keep the massive money pit chugging along that’s also the rich man’s version of Amtrak with a Tesla twist — the California High Speed Rail project. It’s the same program that gives you a credit occasionally on your PG&E bill for natural gas and electricity. What, you thought it was free money? It’s money the government taketh from you from your pocket when you buy gasoline.

Only complete dolts and Sacramento politicians buy into the fantasy companies don’t pass on taxes — direct and otherwise — they are slapped with — through the products they sell.

The government then puts a tiny bit of it back into your pocket and doles the rest out to pet projects after taking their cut for administrative overhead to the tune of $88 million.

This is not saying that for the most part cap-and-trade doesn’t make sense. It’s just that it is a cost for the oil companies and in turn drivers at the gas pump.

The indignant lawmakers have vowed to find out why California gas prices are consistently the highest in the nation. Perhaps they forgot about reformulated gas. It is more expensive to refine. And given it is unique to California, refineries here are the only ones that process it. There’s no debating that it has helped clean the air but it does cost more to produce.

That has led to other issues such as where the oil comes from that California refineries process.

Given cap-and-trade issues and the fact higher quality crude is easier to clean 56.2 percent of the oil used in the state that comes from foreign sources in 2021 according to the California Energy Commission.

Alaska accounted for 28.9 percent and California 14.9 percent.

Back in 1997 oil pumped in California accounted for 50 percent of all gasoline used in the Golden State. Foreign oil in 1997 was 9.9 percent of the total.

It’s completely flipped in 15 years.

Go back to 1982 and 61.4 percent of the oil we used came from within California, 5.6 percent from foreign sources, and the rest from Alaska.

It costs more to ship oil from Columbia and Saudi Arabia to here. And you’d think woke politicians in Sacramento would want to block the stuff from getting here since the regimes running the country are bankrolling a new league for golf pro millionaires and are in cahoots with drug cartels and therefore have blood on their hands.

Let’s not digress.

Who do you think has led the charge to go from 402,230 oil barrels a year from Golden State wells making their way into California gas tanks in 1986 to 151,326 in 2021? It’s the men — and women — who are vowing to investigate the high price of oil.

Sacramento has been pressuring for an end to oil pumping in California through tougher regulations and refusing to allow new wells.

Is that a bad thing? Not necessarily.

Does it add to the cost at the pump when oil from our own state isn’t being used? Of course, it does. It costs money to ship oil half way around the world.

It also suspectable to volatile price fluctuations and supply chain issues.

Then there is the issue of refinery capacity. When was the last new refinery built in California? There was a small one built 53 years ago.

If oil is a safe and sure way to shake down people easy for money as lawmakers contend, you’d think they’d be people dumping money into startups looking for the next Amazon.

Who makes it extremely risky to do so for a myriad of reasons? Sacramento regulations. Again, that may not be bad but it adds to price pressures by reducing competition.

And now that Sacramento votes to kill off new gas-powered vehicle sales within 13 years, do you think anyone is lining up to invest a lot of money in refineries?

As for new oil wells, Sacramento is doing its best to squash such crazy thoughts.

In telling Californians they are going to save us all at the gas pump, the Assembly’s announcement on June 20 about their impending investigation of oil companies stated said firms are “abusing a historic situation to suck profits from California wallets.”

Forget the mirror. This one calls for a House of Mirrors straight from the Midway.

The state is the one that is sucking money like there is no tomorrow out of Californians’ wallets via high gas prices.

It’s up $2 a gallon in just over a year. That means the sales tax collected on a gallon of gas that makes its way into state coffers from gasoline sales is up by almost a third. That’s 12.5 cents more per gallon in the state’s unadulterated cut of gas tax on gasoline. If you pumped 15 gallons over a year ago the state was pocketing $3.75 from its cut of sales tax. The separate gas tax on those 15 gallons the state siphoned was $7.65.

You’re still paying the same $7.65 in state gas tax at 51.1 cents for 15 gallons of gas today. But the state’s sales tax take is now at $5.

Fill up with 15 gallons twice a week for a year and the state is now collecting $585 in sales tax as opposed to $390 a little over a year ago.

That means Sacramento is pocketing a cool $195 in extra “profits” in the form of sales tax off a typical driver.

They make a big ado about a gas tax holiday, but the gas tax per gallon hasn’t changed. The sales tax has.

Perhaps when they legislature gets the mirror, someone should make sure it’s not from the funny house.

Come to think of it, where else can a mirror in Sacramento come from? The California Legislature is the ultimate funny house.

  This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinions of The Courier or 209 Multimedia.