<TABLE>
                                                                                                          EXHIBIT 12.1       

                                                      VALERO ENERGY CORPORATION

                                         COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 
                                                       (Dollars in Thousands)


<CAPTION>
                                               Year Ended             Year Ended                Year Ended         Year Ended 
                                              December 31,        December 31, 1994         December 31, 1993     December 31,
                                             1996      1995   Pro Forma<F1> Historical  Pro Forma<F1> Historical      1992

<S>                                        <C>      <C>         <C>          <C>          <C>          <C>          <C>
Pretax income from continuing 
  operations <F5>. . . . . . . . . . . . . $113,701 $  95,138   $ 16,489     $ 27,982     $ 76,698     $ 68,224     $131,419 
Add (Deduct):                                                   
 Net interest expense <F4> . . . . . . . .   95,177   101,222     98,695       76,921       89,413       37,182       30,423 
 Amortization of previously capitalized                         
  interest . . . . . . . . . . . . . . . .    6,061     6,820      6,847        6,282        6,300        4,998        4,544 
 Interest portion of rental expense <F2> .   14,034    13,251      8,259        6,695        8,003        4,316        4,214 
 Distributions (less than)/in excess of                             
  equity in earnings of VNGP, L.P. <F3>. .     -         -          -          18,968         -          (4,970)      (1,067)
 Distributions (less than) equity in 
  earnings of joint ventures <F4>. . . . .   (3,899)   (4,304)    (2,437)      (2,437)        -            -            -  
  Earnings as defined. . . . . . . . . . . $225,074  $212,127   $127,853     $134,411     $180,414     $109,750     $169,533 
                                                                               
Net interest expense <F4>. . . . . . . . . $ 95,177  $101,222   $ 98,695     $ 76,921     $ 89,413     $ 37,182     $ 30,423 
Capitalized interest . . . . . . . . . . .    4,328     4,699      2,558        2,365       14,048       12,335       15,853 
Interest portion of rental expense <F2>. .   14,034    13,251      8,259        6,695        8,003        4,316        4,214 
  Fixed charges as defined . . . . . . . . $113,539  $119,172   $109,512     $ 85,981     $111,464     $ 53,833     $ 50,490 
                                                                               
Ratio of earnings to fixed charges . . . .     1.98x     1.78x      1.17x        1.56x        1.62x        2.04x        3.36x


<FN>
<F1> The pro forma computations reflect the consolidation of the Partnership with the Company for all of 1994 and 1993. 

<F2> The interest portion of rental expense represents one-third of rents, which is deemed representative of the 
     interest portion of rental expense.

<F3> Represents the Company's undistributed equity in earnings or distributions in excess of equity in earnings of the
     Partnership for the periods prior to and including May 31, 1994.  On May 31, 1994, the Merger of the Partnership 
     with the Company was consummated and the Partnership became a wholly owned subsidiary of the Company.

<F4> The Company has guaranteed its pro rata share of the debt of Javelina Company, an equity method investee in 
     which the Company holds a 20% interest.  The interest expense related to the guaranteed debt is not included in 
     the computation of the ratio as the Company has not been required to satisfy the guarantee nor does the Company 
     believe that it is probable that it would be required to do so.

<F5> The 1994 historical and pro forma amounts have been restated to reflect the effects of a prior period adjustment
     resulting in a charge to 1994 income for an acquisition expense accrual originally charged to property, plant and
     equipment.
</TABLE>