Think gasoline is too expensive in California? Newsom has a plan to cut pain at the pump

California Gov. Gavin Newson released a proposal Friday that would force oil refineries to maintain minimum inventory levels. The goal is to stabilize supply and avoid sudden price spikes at California pumps.

The plan, touted as a "first-in-the-nation proposal," would authorize the California Energy Commission to require minimum fuel reserves at oil refineries "to avoid supply shortages that create higher prices for consumer," according to statement issued by the governor's office.

"Price spikes at the pump are profit spikes for Big Oil," Newsom said. "Refiners should be required to plan ahead and backfill supplies to keep prices stable instead of playing games to earn even more profits. By making refiners act responsibly and maintain a gas reserve, Californians would save money at the pump every year."

Had the proposal been in effect in 2023, California drivers would have saved more than $650 million in gas costs, representatives said.

A study by the CEC determined that there were 63 days during 2023 during which California refiners were maintaining less than 15 days of supply, resulting in increased prices, according to the statement.

Officials pointed out similar mandates have been enacted in the European Union, Japan, and Australia.

Maintenance planning requirement

Newsom's plan would also allow the CEC to mandate that refiners demonstrate they have adequate plans to address production loss when conducting maintenance on refinery facilities.

CEC Division of Petroleum Market Oversight Tai Milder said such a policy is needed to prevent oil refiners from using maintenance to increase profits.

"The data is clear: oil refiners have been racking up profits by planning maintenance that reduces supply during our busy driving seasons," he said. "The Governor’s proposal gives us new tools to require refiners to plan responsibly and prevent price gouging during maintenance.”

Previous efforts to 'rein in the industry'

Friday's announcement is the latest in a series of efforts by Newsom to "rein in the industry," according to his office .

A law signed into law last year by Newsom created a watchdog group within the CEC to look out for and penalize companies in the event of price gouging.

In 2022, he proposed levying a "windfall tax" on oil companies that made what his office called "excess oil profits."

Highest gas tax in the nation

Meanwhile, California's gas tax increased by 2 cents in July to 60 cents per gallon.

The state gasoline tax is the highest in the nation.

It does not include an additional federal excise tax of 18 cents per gallon.

This article originally appeared on Victorville Daily Press: Think gasoline is too expensive in California? Newsom has a plan to cut pain at the pump