- California Governor Gavin Newsom has announced a plan to help stabilize gas prices.
- Under the proposal, refiners would be required to maintain a minimum fuel reserve to prevent price spikes such as those resulting from downtime due to maintenance.
- The move could save drivers hundreds of millions of dollars every year, but details about the plan are hazy.
It’s no secret that California has some of the highest gas prices in the country. According to AAA, regular unleaded costs an average of $4.598 per gallon in the Golden State, which is $1.187 more than the national average. The only state with more expensive gas is Hawaii, where regular unleaded averages $4.656 per gallon.
Governor Gavin Newsom is fighting back with a new proposal to “prevent price spikes and save Californians money.” Under the plan, the California Energy Commission (CEC) would be authorized to require petroleum refiners to “maintain a minimum fuel reserve to avoid supply shortages that create higher prices for consumers.”
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The proposal comes after the commission discovered refiners maintained less than 15 days of supply for 63 days in 2023. This reportedly drove up prices and generated millions of dollars for oil companies.
The CEC’s Director of Petroleum Market Oversight, Tai Milder, was even more direct as he claimed “oil refiners have been racking up profits by planning maintenance that reduces supply during our busy driving seasons.” He went on to say the proposal would “require refiners to plan responsibly and prevent price gouging during maintenance.”
Michael Gauthier / CarScoops
Specifics are hazy, but the proposal calls for penalties on refiners that fail to maintain enough fuel inventory. However, it’s not clear if these would be harsh enough to have an impact. That being said, the Governor’s office claimed the proposal would have saved Californians upwards of $650 (£500 / €586) million in gas costs had it been in effect last year.
In a statement, Newsom said “Price spikes at the pump are profit spikes for Big Oil. 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.”
Refiners aren’t happy and Reuters quoted the CEO of the Western States Petroleum Association as saying the plan is “nothing more than a political attack on consumers and our industry.”
Michael Gauthier / CarScoops
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