The California Senate voted 30-8 on Thursday to approve Governor Gavin Newsom’s proposal to create an oversight committee to punish oil refineries when their profit margins soar too high and to hold the oil industry accountable for profiteering on gas costs. As part of his new openness and accountability measures, Governor Newsom has proposed a price-gouging penalty to punish “Big Oil.”
The purpose of the price gouging penalty is to prevent future instances of price gouging against California customers. Refiners who have engaged in price gouging will be subject to a civil penalty, which can be imposed by the CEC through a public rulemaking process guided by expert analysis.
Last year, energy companies in California increased the price of gasoline to a record $6.42 per gallon, a $2.61 premium over the national average. Most of that increase went to Big Oil’s bottom line, which means they made over $200 billion in profit last year.
The measure may be signed as soon as next Monday by California Governor Gavin Newsom. In addition, he issued an order to the California Air Resources Board to allow oil refineries to begin producing winter-blend gasoline sooner than usual.
As Governor Newsom put it, In a statement, Newsom claimed that oil companies had been able to “rip off California families for decades while making record profits and hiding their books from public view.” By proposing this, California’s political leaders are putting an end to the era of oil’s disproportionate power and holding the industry to account. The swiftness with which the Senate moved allowed us to get this done for the people of California. The cost of gas is excessive. It’s time for a tax on oil companies’ windfall earnings, which are being used to raise prices at the pump.
Co-sponsor Attorney General Rob Bonta said, “We’re sick of seeing exorbitant profits by big oil companies like Chevron and Exxon while many Californians are struggling to make ends meet.” To protect California’s industrious families and to ensure the market is regulated fairly, I am joining the Governor as a sponsor of this bill. It is unethical to intentionally overcharge Californians. Big energy needs to start acting responsibly or face the consequences.
As Senator Nancy Skinner (D-Berkeley) writes: “In 2022, while oil corporations were hauling in more than $200 billion in profits, Californians were hit at the pump with record high gas prices, $2.61 per gallon higher than the national average. The price of crude oil was falling at the time those sky-high rates were implemented, and there had been no changes to taxes, fees, or regulations in our state. Today, the Senate passed SBX 1-2, letting every Californian know that their senators have their backs. In the event that energy companies manipulate prices and pay their profits at the cost of Californians, we will be able to hold them accountable thanks to the robust transparency and oversight measures included in SBX 1-2. I’d like to express my gratitude to Governor Newsom for introducing this historic bill, as well as to my fellow legislators for their diligence in drafting and subsequently approving SBX 1-2 in the Senate today.
Source: Office of The Governor Gavin Newsom
CWEBÂ has provided some information for this story.
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