California Gov. Gavin Newsom is calling on state legislators to pass price gouging rules for oil companies.
At the same time the California Legislature convened for the 2023 regular session, Gov. Gavin Newsom opened a special session to address concerns about high fuel prices.
The legislation pursued by the governor would authorize a price gouging penalty on oil companies.
Newsom said a spike in fuel prices this fall resulted in record refiner profits of $63 billion in 90 days.
“Big Oil is ripping Californians off,” Newsom said in a news release. “A price gouging penalty is needed to hold them accountable for profiteering at the expense of California families.
Golden State fuel costs
On July 1, the state increased the 51.1-cent excise tax collected on gas purchases by 2.8 cents per gallon to 53.9 cents. The 38.9-cent diesel rate increased by 2.1 cents per gallon to 41 cents.
California’s average diesel price is about 81 cents above the national average for a gallon of on-highway diesel fuel, according to AAA. The state’s average gas price is about $1.33 above the national average for a gallon of regular gas.
California rules are part of the problem
Critics say California government has contributed to the high fuel costs. They cite the legislature and the governor’s refusal to put a moratorium on the state’s fuel taxes.
They add that imposing a new tax on oil/gas suppliers would result in fuel prices climbing even higher.
Additionally, critics point out that California regulations link taxes on gas and diesel to inflation adjustments each July. The result is increased fuel costs each year.
Administration counters critics
The governor’s office said this fall’s spike occurred while crude oil prices dropped, state taxes and fees remained unchanged and fuel prices did not increase outside the western U.S.
Newsom said the high prices went straight to the industry’s bottom line.
During the special session, legislators also will consider efforts to permit state agencies to more closely review fuel costs, profits and pricing as well as provide the state with greater regulatory oversight of the refining, distribution and retailing segments of the fuel market in California. LL
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