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CA Lawmakers Weigh Price Gouging Penalties On Oil Companies

CALIFORNIA — Gov. Gavin Newsom has called on Golden State legislators to weigh “price gouging” penalties on oil companies as lawmakers return to Sacramento this week.

Newsom said he is focused on holding oil companies accountable for an “unexplained” spike in gas prices. The governor will hold a special legislative session on Monday to address high gas prices as new lawmakers take their seats for the first time.

“Every Californian deserves to know why we were being fleeced at the pump even as gas prices declined across the country and crude oil prices were going down,” Newsom wrote in a statement.

Last week, he asked legislators to pass “a price gouging penalty on oil companies that will keep money in Californians’ pockets.”

Previously, Newsom called for “a windfall tax on oil companies that would go directly back to California taxpayers,” a noticeable pivot from using the word “tax.”

During the special session, Newsom said he intended to address the oversight of gas costs, profits and pricing.

“We look forward to reviewing the Governor’s detailed proposal,” Democratic Senate President Pro Tem Toni Atkins of San Diego and Assembly Speaker Anthony Rendon of Lakewood said in a joint statement.

The hearing comes on the heels of a letter that was sent by the California Energy Commission to all of the major oil companies that service California last month.

“As I expressed in my letter to the oil industry last week, the recent sudden increases in prices at the pump are unacceptable and place an undue high burden on California families and businesses,” CEC Chair David Hochschild wrote in early October.

Five major oil refiners — Chevron, Marathon, Phillips 66, PBF Energy and Valero — rejected invites to a separate hearing on Nov. 29, which addressed a record gas price spike of 86 cents over 10 days that resulted in record profits for the companies, the governor’s office said.

“The oil industry had their chance today to explain why they made record profits at our expense but they chose to stonewall us,” Newsom said that day.

It remains to be seen what Newsom’s proposal will hold, but Atkins and Rendon’s offices said lawmakers don’t plan to take substantive action on any proposals until the start of next year, CalMatters reported.

“All this really is a political show,” said Kevin Slagle, spokesman for the Western States Petroleum Association, the group that lobbies on behalf of the oil industry. “He could’ve had the discussion before the election, he chose not to,” Slagle said.

Nationally, the average price for a regular gallon of gas was $3.41 on Sunday. In California, the average price for a regular gallon of gas was $4.78 — down from $5.47 one month ago, according to AAA.

Gas prices have plummeted in recent weeks.

For example, the average price of a gallon of self-serve regular gasoline in Los Angeles County dropped Sunday for the 24th consecutive day, decreasing 2.6 cents to $4.862, its lowest amount since Feb. 25.

The national average price also dropped for the 25th consecutive day, decreasing 1.2 cents to $3.413.

“Gas prices are dropping nationwide, with some of the largest decreases happening on the West Coast,” Andrew Gross, AAA spokesperson, said on Nov. 28. “But the West also has the farthest to fall because its prices are so elevated. For instance, California is still $1.50 higher than the national average.”

Read More: CA Lawmakers Weigh Price Gouging Penalties On Oil Companies

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