California Governor Gavin Newsom has enacted a new law that seeks to stabilize gas prices in the state, which is known for having the highest fuel costs in the country. The legislation is part of Newsom’s ongoing efforts to take on the oil industry regarding energy pricing and the repercussions of climate change.
As of Monday, the average price for regular unleaded gasoline in California was approximately $4.68 per gallon, significantly higher than the national average of $3.20, according to recent reports from AAA. This disparity is largely attributed to the state’s taxes and stringent environmental regulations.
The inspiration for this new law came from findings by the Division of Petroleum Market Oversight in California, which revealed that fluctuations in gas prices are primarily driven by global crude oil price variations and unexpected refinery shutdowns. The enacted legislation empowers energy regulators to mandate that refineries maintain a certain level of fuel reserves. This initiative aims to mitigate sudden price increases during maintenance periods when refineries are temporarily out of operation. Supporters of the law claim it has the potential to save residents billions in gas expenses.
During the signing ceremony at the state Capitol, Newsom took a stand against the oil industry’s attempts to thwart the legislation’s passage. He accused industry players of manipulating the market for profit, stating, “They continue to lie, and they continue to manipulate… They have been raking in unprecedented profits because they can.”
Although the legislation was signed just weeks before the November elections, Newsom emphasized that it is not politically motivated, as he has two more years left in his tenure.
However, some critics argue that the law might inadvertently elevate overall gas prices and jeopardize worker safety by increasing government oversight of refinery maintenance. They contend that putting off necessary upkeep could lead to accidents. Catherine Reheis-Boyd, who heads the Western States Petroleum Association, expressed skepticism about lawmakers’ understanding of the industry, stating, “Legislators still fail to understand our industry or what drives high gas prices.”
On the legislative floor, Assembly Republican Leader James Gallagher attempted to halt further discussions on the bill prior to its vote. Republicans proposed alternative measures to lower gas prices, all of which were denied in the Democrat-controlled Legislature. One such proposal aimed to exempt transportation fuels from the state’s cap-and-trade initiative but did not pass.
Newsom introduced this bill in August towards the end of the regular session, yet lawmakers requested additional time to deliberate its implications. He subsequently called a special session for its passage.
In a similar manner, Newsom convened a special session in 2022 to address the excessive profits of oil companies through legislation.
State Senate President Pro Tempore Mike McGuire remarked that this new law represents a crucial step in the state’s broader efforts to alleviate living costs for Californians. He stated, “This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight. I firmly believe Californians are tired of the price spikes.”
