EXHIBIT 11.1

                VALERO ENERGY CORPORATION AND SUBSIDIARIES
              (formerly Valero Refining and Marketing Company)
                   COMPUTATION OF EARNINGS PER SHARE
              (Thousands of Dollars, Except Per Share Amounts)


                                                      Three Months Ended               Six Months Ended
                                                            June 30,                       June 30,
                                                     1997           1996              1997            1996

                                                                                      
COMPUTATION OF EARNINGS PER
 SHARE ASSUMING NO DILUTION:
   Income from continuing 
     operations. . . . . . . . . . . . . . .  $    27,598   $       18,164     $     47,409        $   21,127 

   Income (loss) from discontinued 
      operations, net of income taxes. . . .  $   (10,869)  $        2,677     $    (15,240)       $   19,628 
   Less:  Preferred stock dividend 
      requirements and redemption 
      premium. . . . . . . . . . . . . . . .       (1,826)          (2,841)          (4,592)           (5,682)

   Income (loss) from discontinued 
      operations applicable to common 
      stock. . . . . . . . . . . . . . . . .  $   (12,695)  $         (164)    $    (19,832)     $     13,946 
 
   Weighted average number of shares of
      common stock outstanding . . . . . . .   50,163,762       43,901,049       47,287,734        43,824,800 

   Earnings (loss) per share assuming 
     no dilution:
      Continuing operations. . . . . . . . . $        .55   $          .41     $       1.00      $        .48 
      Discontinued operations. . . . . . . .         (.26)            -                (.42)              .32 
         Total . . . . . . . . . . . . . . . $        .29   $          .41     $        .58      $        .80 

COMPUTATION OF EARNINGS PER
 SHARE ASSUMING FULL DILUTION:
   Income from continuing operations 
      assuming full dilution . . . . . . . . $     27,598    $      18,164     $     47,409      $     21,127 

   Income (loss) from discontinued 
     operations, net of income taxes . . . . $    (10,869)   $       2,677     $    (15,240)     $     19,628  
   Less:  Preferred stock dividend 
      requirements and redemption 
      premium. . . . . . . . . . . . . . . .       (1,826)          (2,841)          (4,592)           (5,682)
   Add:  Reduction of preferred stock 
      dividends applicable to the 
      assumed conversion of Convertible 
      Preferred Stock at the beginning 
      of the period. . . . . . . . . . . . .        1,826            2,696            4,522             5,391 

   Income (loss) from discontinued 
      operations applicable to common 
      stock assuming full dilution . . . . .  $   (10,869)   $       2,532     $    (15,310)     $     19,337 

   Weighted average number of shares of
      common stock outstanding . . . . . . .   50,163,762       43,901,049       47,287,734        43,824,800 
   Weighted average common stock
      equivalents applicable to stock 
      options. . . . . . . . . . . . . . . .      584,107          553,341          561,703           496,078 
   Weighted average shares issuable upon 
      assumed conversion of Convertible 
      Preferred Stock at the beginning 
      of the period. . . . . . . . . . . . .    3,596,219        6,381,798        4,989,009         6,381,798 

   Weighted average shares used for 
     computation . . . . . . . . . . . . . .   54,344,088       50,836,188       52,838,446        50,702,676 

   Earnings (loss) per share assuming 
    full dilution:
      Continuing operations. . . . . . . . .  $       .51      $       .36      $       .90       $       .42 
      Discontinued operations. . . . . . . .         (.20)             .05             (.29)              .38 
         Total . . . . . . . . . . . . . . .  $       .31 (a)  $       .41 (b)  $       .61  (a)  $       .80 (b)

<FN>                                    
(a)   This calculation is submitted in accordance with paragraph 601(b)(11) of Regulation S-K although 
      it is contrary to APB Opinion No. 15 because it produces an antidilutive result.
(b)   This calculation is submitted in accordance with paragraph 601(b)(11) of Regulation S-K although
      it is not required by APB Opinion No. 15 because it results in dilution of less than 3%.