Please ensure Javascript is enabled for purposes of website accessibility
California Lawmakers OK Potential Fines for High Gas Prices
gvw_ap_news
By Associated Press
Published 2 years ago on
March 27, 2023

Share

Getting your Trinity Audio player ready...

SACRAMENTO, Calif. — California lawmakers on Monday approved the nation’s first penalty for price gouging at the pump, voting to give regulators the power to punish oil companies for profiting from the type of gas price spikes that plagued the nation’s most populous state last summer.

The Democrats in charge of the state Legislature worked quickly to pass the bill on Monday, just one week after it was introduced. It was an unusually fast process for a controversial issue, especially one opposed by the powerful oil industry that has spent millions of dollars to stop it.

California Governor Gavin Newsom Expected to Sign the Bill Into Law This Week

Democratic Gov. Gavin Newsom used his political muscle to pass the bill, which grew out of his call last December for a special legislative session to pass a new tax on oil company profits after the average price of gas in California his a record high of $6.44 per gallon, according to AAA. Taking on the oil industry has been a major policy priority for Newsom, who is widely viewed as a future presidential candidate.

He is expected to sign the bill into law this week.

Legislative leaders rejected his initial call for a new tax because they feared it could discourage supply and lead to higher prices.

Instead, Newsom and lawmakers agreed to let the California Energy Commission decide whether to penalize oil companies for price gouging. But the crux of the bill isn’t a potential penalty. Instead, it’s the reams of new information oil companies would be required to disclose to state regulators about their pricing.

The companies would report this information, most of it to be kept confidential, to a new state agency empowered to monitor and investigate the petroleum market and subpoena oil company executives. The commission will rely on the work of this agency, plus a panel of experts, to decide whether to impose a penalty on oil company profits and how much that penalty should be.

“If we force folks to turn over this information, I actually don’t believe we’ll ever need a penalty because the fact that they have to tell us what’s going on will stop them from gouging our consumers,” said Assemblymember Rebecca Bauer-Kahan, a Democrat from Orinda.

California Gas Prices Highest in the Nation

California’s gas prices are always higher than the rest of the country because of the state’s taxes and regulations. California has the second-highest gas tax in the country at 54 cents per gallon. And it requires a special blend of gasoline that is better for the environment but more expensive to produce.

But state regulators say those taxes and fees aren’t enough to explain last summer, when the average cost of a gallon of gasoline in California was more than $2.60 higher than the national average.

“There’s truly no other explanation for these historically high prices other than greed,” said Assemblymember Pilar Schiavo, a Democrat from Chatsworth. “The problem is we don’t have the information that we need to prove this, and we don’t have the ability to penalize the kind of historic price gouging we saw last year.”

The oil industry recorded massive profits last year, following years of huge losses during the pandemic when more people stayed home and fewer people were on the road.

Eloy Garcia, lobbyist for the Western States Petroleum Association, said California’s high gas prices are the result of decades of public policy decisions that have made the state an island in the global petroleum market and driven many oil refiners out of the state. He noted California does not have a pipeline to send oil into the state, meaning it has to ship what it can’t produce itself from the ocean, which takes longer and costs more.

“We’re not like Texas. We’re not like Louisiana. We’re not like the Northeast,” Garcia said. “We do not have a fungible fuel supply. We have chosen to do that. We have set ourself up by 30 years of public policy.”

Garcia said Monday’s vote “sends a clear signal not to invest in California.”

Lauren Sanchez, senior climate advisor for Gov. Gavin Newsom, said the state has plenty of supply, noting California oil refineries exported 12% of their product to other states last year.

“We’re also the third-largest gasoline market in the world for these companies,” she said.

 

RELATED TOPICS:

DON'T MISS

President Trump’s Tariffs Could Be the Political Tipping Point

DON'T MISS

Order That Kept Water in the Kern River Reversed by 5th District Court of Appeal

DON'T MISS

As Dem Candidates for Governor Increase, They Wait for Harris to Decide

DON'T MISS

No More Calling ‘Shotgun?’ CA Could Ban Teens From Riding in Front Seat

DON'T MISS

Protests Planned All Over the World Aimed at Donald Trump and Elon Musk

DON'T MISS

Average US Rate on a 30-Year Mortgage Dips to 6.64% for the Second Drop in 2 Weeks

DON'T MISS

Valley Crime Stoppers’ Most Wanted Person of the Day: Christopher Robert Sharkey

DON'T MISS

Fresno Man Arrested in Armed Robbery After Search Warrant Executed

DON'T MISS

Diehard Baseball Fans in Sacramento Welcome Athletics and Hope They Stay Awhile

DON'T MISS

Carbon Monoxide Was Cause of Death of Brett Gardner’s Teen Son, Officials Confirm

UP NEXT

Diehard Baseball Fans in Sacramento Welcome Athletics and Hope They Stay Awhile

UP NEXT

California’s Schools Chief Has a $200,000 Salary and a Side Gig

UP NEXT

Xavier Becerra Enters 2026 California Governor’s Race

UP NEXT

Inside a $17 Billion Maintenance Backlog Plaguing California’s Universities

UP NEXT

California Lawmakers Reject Bills to Restrict Transgender Youth in School Sports

UP NEXT

California Just Blew Its First Deadline for Voter-Approved Healthcare Measure

UP NEXT

CA Snowpack Is Near-Average. What Does This Mean for Water Supplies?

UP NEXT

California Gov. Newsom Says the Democratic Brand Is ‘Toxic’

UP NEXT

Silver Fire Grows to 1,250 Acres, Threatens Homes in Inyo County

UP NEXT

Sue or Hold Back? The University of California Does Both as It Faces Trump’s Wrath

No More Calling ‘Shotgun?’ CA Could Ban Teens From Riding in Front Seat

47 minutes ago

Protests Planned All Over the World Aimed at Donald Trump and Elon Musk

58 minutes ago

Average US Rate on a 30-Year Mortgage Dips to 6.64% for the Second Drop in 2 Weeks

1 hour ago

Valley Crime Stoppers’ Most Wanted Person of the Day: Christopher Robert Sharkey

1 hour ago

Fresno Man Arrested in Armed Robbery After Search Warrant Executed

2 hours ago

Diehard Baseball Fans in Sacramento Welcome Athletics and Hope They Stay Awhile

3 hours ago

Carbon Monoxide Was Cause of Death of Brett Gardner’s Teen Son, Officials Confirm

3 hours ago

Bettors Back Duke Men and UConn Women for National Championships

3 hours ago

Flores Homers, Matos and Wade Also Go Deep to Help Giants Cap Sweep of Astros

3 hours ago

Fresno County Authorities Need Help Finding Family of Alejandro Solis

3 hours ago

President Trump’s Tariffs Could Be the Political Tipping Point

President Donald Trump called it “Liberation Day” on Wednesday as he unveiled reciprocal tariffs, but experts warn the move coul...

28 minutes ago

President Donald Trump holds a signed executive order during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. (AP/Evan Vucci)
28 minutes ago

President Trump’s Tariffs Could Be the Political Tipping Point

35 minutes ago

Order That Kept Water in the Kern River Reversed by 5th District Court of Appeal

43 minutes ago

As Dem Candidates for Governor Increase, They Wait for Harris to Decide

47 minutes ago

No More Calling ‘Shotgun?’ CA Could Ban Teens From Riding in Front Seat

On April 5th, the "Hands Off!" group will hold an international protest, including a Fresno demonstration at Fashion Fair Mall, urging Donald Trump and Elon Musk to stop their influence over vital social programs and rights. (Hands Off!)
58 minutes ago

Protests Planned All Over the World Aimed at Donald Trump and Elon Musk

A for sale sign stands outside a home on the market in the Alamo Placita neighborhood Tuesday, Aug. 27, 2024, in central Denver. (AP File)
1 hour ago

Average US Rate on a 30-Year Mortgage Dips to 6.64% for the Second Drop in 2 Weeks

Christopher Robert Sharkey is Valley Crime Stoppers' Most Wanted Person of the Day for April 3, 2025. (Valley Crimes Stoppers)
1 hour ago

Valley Crime Stoppers’ Most Wanted Person of the Day: Christopher Robert Sharkey

Johnny Hernandez, 38, was arrested in connection with an armed robbery at Adina Valley Market on April 1 and faces multiple felony charges, including robbery and assault with a firearm. (Fresno County SO)
2 hours ago

Fresno Man Arrested in Armed Robbery After Search Warrant Executed

Help continue the work that gets you the news that matters most.

Search

Send this to a friend