California Gov. Gavin Newsom signed legislation on Monday intended to prevent spikes in gas prices by giving the California Energy Commission, the state’s energy regulatory authority, to power to direct refiners to store more gasoline and prevent supply shortages.
California has the most expensive gas in the United States with a gallon of regular gasoline averaging $4.68 today, according to AAA. That’s nearly 50 percent higher than the national average of $3.20.
Gas is so expensive in California in large part because its gasoline taxes are the country’s highest. Strict environmental standards also make its summer blend costlier. Due to the high cost of business and heavy regulation, the state has limited refineries, which process crude oil into retail products like gasoline.
Unsurprisingly, California is home to the largest number of electric vehicles in the country by far.
In a press conference on Monday, Newsom said, “Big oil does not have your back — period. Full stop.” The new law, which comes into effect after 90 days, puts Newsom at loggerheads not only with the state’s oil industry, but also with labor unions.
Last week, leaders of five labor unions sent a letter to two top state legislators opposing the “unprecedented regulatory authority” given to the state energy commission to “bureaucratically dictate safety maintenance at in-state refineries.” The labor leaders allege that the ABX2-1 bill had moved forward without the input of experienced oil industry workers, which may be detrimental to their safety and livelihoods.
The bill, passed in a special legislative session called by Newsom, was opposed even by some Democrats who fear that it could actually cause gas prices to rise.
This is not the first time Newsom has taken on the oil industry. Last year, he signed the country’s first so-called gas price gouging law as prices at the pump in California surged past $6 for a regular gallon.
The law established a new watchdog to monitor gas prices and penalize companies deemed to be engaging in price gouging. Gas prices in California have since dropped, as they have across the country and worldwide, but remain the highest in the United States.
Globely News covers the game changers transforming the worlds of business, sports, politics, and technology. From AI and electric vehicles to the rise of China and the NFL's next stars, we've got you covered.