Governor Newsom announces legislative push against rising gas prices

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Governor Newsom, Speaker Rivas announce special session legislation to prevent gas price spikes

Sep 3, 2024

SACRAMENTO – Today, Governor Gavin Newsom and Assembly Speaker Robert Rivas announced legislation aimed at preventing gasoline price spikes as part of the Governor’s special session on gas prices.

The legislation, soon to be introduced by joint authors Assemblymember Cecilia Aguiar-Curry and Assemblymember Gregg Hart, addresses the issue of gasoline price spikes at the pump. It is projected to save Californians hundreds of millions, if not billions, of dollars annually.

On Saturday, Governor Newsom convened a special session of the legislature to ensure oil refiners manage California’s gasoline supply responsibly and reduce costs for consumers.

“I’m glad to see the Assembly is moving this important proposal forward to save Californians hundreds of millions of dollars at the pump. Gas price spikes are profit spikes for Big Oil, and California won’t stand by as families get gouged,” said Governor Gavin Newsom.

“We must stop oil companies from raking-in record profits at the expense of Californians,” said Speaker Robert Rivas (D-Salinas). “During this important special session, the Assembly will convene public hearings that thoroughly vet proposals. We’ll hear from experts and ensure that the public has a voice in the process. I’m committed to delivering solutions that rein-in soaring gas costs and provide real savings at the pump.”

“Our Assembly understands the assignment, and that is to do everything in our power to lower the cost of living in our state,” said Majority Leader Cecilia Aguiar-Curry (D-Winters). “I appreciate Speaker Rivas taking action to address gas price spikes and ensuring legislation gets the public hearings and consideration that Californians deserve.”

“When gas prices spike because of supply constraints, everyday Californians suffer and the oil industry profits. This legislation will protect California consumers by ensuring refineries maintain a stable fuel supply,” said Assemblymember Gregg Hart (D-Santa Barbara). “This bill is a common-sense solution. By requiring oil companies to better plan for refinery shutdowns, we can save Californians a lot of money from reduced gas prices.”

Principal co-authors of the bill include Assemblymembers Dawn Addis (D-Morro Bay), Steve Bennett (D-Oxnard), Isaac Bryan (D-Los Angeles), Corey Jackson (D-Riverside), Ash Kalra (D-San Jose), Alex Lee (D-San Jose), Jim Wood (D-Healdsburg).

Gas price spikes on consumers are profit spikes for oil companies, often caused by refiners not backfilling supplies during maintenance periods.

During a recent workshop, officials from the California Energy Commission (CEC) and Division of Petroleum Market Oversight (DPMO) presented data underscoring the urgent need for Governor Newsom’s new proposal to protect Californians from price hikes.

If this proposal had been in effect last year, Californians could have saved significant amounts at the pump according to DPMO analysis:

Preventing gas price spikes

The Governor’s special session focuses on passing measures designed to save consumers money. The proposed legislation would authorize CEC to require petroleum refiners maintain minimum inventories throughout distribution chains and plan resupply during scheduled maintenance periods. Texts related to this proclamation are available online.

Following gasoline price increases in 2022, Governor Newsom called for a special session leading to reforms holding Big Oil accountable. These included creating an independent watchdog agency: Division of Petroleum Market Oversight. This agency found higher gasoline prices last September were due partly to suspicious market transactions and inadequate planning during refinery maintenance periods.

In January this year, this watchdog sent proposals outlining specific reforms including minimum inventory requirements aimed at preventing future price hikes due lack stable supply levels.

The state’s gasoline watchdog also noted 2023 saw similar issues with unplanned refinery shutdowns leading substantial retail pricing jumps indicating large refining margins between July-September period contributed significantly towards overall consumer pricing impacts.