California Lawmakers Approve Nation’s First Penalties for High Gas Prices


On Monday, California lawmakers voted to approve the nation’s first penalties for soaring gas prices, giving regulators the power to punish oil companies. Soaring prices hit Californians last summer.

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

Democratic Gov. Gavin Newsom used his political power to pass the bill, pushing the average price of gas in California to a record high of $6.44 a gallon at a special legislative session last December. He called for a new tax on company profits. ah. Challenging the oil industry was a major policy priority for Newsom, who is seen as a future presidential candidate.

He plans to sign the bill this week.

Legislative leaders rejected his initial request for a new tax. They feared that it would hinder supply and lead to higher prices.

Instead, Newsom and lawmakers agreed to let the California Energy Commission decide whether to punish oil companies for price gouging. A new set of information that must be disclosed to state regulators about pricing.

Both companies will report this information, most of it classified, to new government agencies empowered to monitor and investigate the oil market, and to submit subpoenas to oil company executives. The Commission will rely on the work of this agency and a panel of experts to decide whether to penalize oil company profits and the amount of such penalties.

“If you force people to hand over this information, I don’t think there will be a need for penalties because the fact that they actually have to tell you what’s going on will stop them gouging the consumer. No. Kahan, a Democrat from Olinda.

Gas prices in California have always been higher than elsewhere due to state taxes and regulations. California’s gas tax is the second highest in the nation, at 54 cents per gallon. It also 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 alone 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 is no other explanation for this historic high than greed,” said Congressman Pilar Schiabo, a Democrat from Chatsworth. We don’t have it, and we don’t have the ability to punish the historic price hikes we saw last year.”

The oil industry posted huge gains last year after suffering huge losses as more people stayed home and less people went out during the pandemic.

Eloy Garcia, a lobbyist for the Western States Petroleum Institute, said high gas prices in California have made the state an island in the global oil market and forced many oil refiners out of the state for decades. said it was the result of a public policy decision. He pointed out that California does not have pipelines to send oil within the state. That means California has to ship out of the ocean what it can’t produce on its own, which is time-consuming and expensive.

“We’re not like Texas. We’re not like Louisiana. We’re not like the Northeast,” Garcia said. “We don’t have an alternative fuel supply. We have chosen it. We have established ourselves through 30 years of public policy.”

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

Newsom senior climate adviser Lauren Sanchez said the state has ample supplies, noting that California oil refiners exported 12% of their products to other states last year.

“For these companies, we are also the third largest gasoline market in the world,” she said.


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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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