Special Session on Gas Price Spikes Begins as California Targets Oil Industry Practices

In 2022 alone, this practice cost California drivers upwards of $2 billion, while oil refiners made a staggering $50 billion in profits.Photo byDylan HunteronUnsplash

The California Legislature has begun hearings in a special session focused on Governor Gavin Newsom’s proposal to prevent gas price spikes, as state officials seek to protect consumers from the impacts of refinery practices that drive up fuel costs. The session follows last year’s uncovering of evidence that when oil companies let fuel supplies run low, gas prices surge, enabling refiners to earn windfall profits while Californians pay the price at the pump.

In 2022 alone, this practice cost California drivers upwards of $2 billion, while oil refiners made a staggering $50 billion in profits. According to the state’s new petroleum watchdog, California’s gas prices are once again on the rise due to refinery maintenance, low inventories, and spot market volatility, even as crude oil prices and national gas prices decline.

The Governor’s proposal, ABx2-1, co-authored by Assemblymembers Cecilia Aguiar-Curry and Gregg Hart, aims to address this by requiring oil refiners to maintain a minimum fuel inventory, ensuring adequate supply to prevent price spikes during refinery outages. The bill also allows the California Energy Commission (CEC) to mandate that refiners plan for resupply during scheduled maintenance.

Governor Newsom criticized the oil industry’s response, stating, “Big Oil is wasting no time trying to distort the facts, but the reality is simple: Californians deserve protection from manipulated price hikes, and this proposal is a critical step forward.”