California Enacts Law to Curb Gas Price Spikes

California Gov. Gavin Newsom signed a new law on Monday to help combat soaring gas prices, marking a notable escalation in his ongoing confrontation with the oil industry over energy costs and the impact of global warming.

At the moment, residents of California face the highest gas prices in the nation, with the average cost for regular unleaded gas hovering around $4.68 per gallon—substantially above the national average of $3.20, according to gas prices website, AAA.

The new legislation responds to findings from the state’s Division of Petroleum Market Oversight, which identified that price spikes often stem from fluctuations in global crude oil prices and unexpected refinery outages.

The law empowers energy regulators to mandate that refineries maintain a specific reserve of fuel, aiming to prevent sudden price surges when facilities go offline for maintenance.

Proponents argue that this measure could save Californians billions at the pump.

At a signing ceremony in the state Capitol, Newsom lambasted the oil industry for its attempts to derail the legislation.

He said: “They continue to lie, and they continue to manipulate. They have been raking in unprecedented profits because they can.”

With the November election looming, Newsom emphasized that the legislation transcends political considerations, noting that he has two years left in his second term.

However, critics warn that the law could inadvertently drive up overall gas prices and compromise worker safety by increasing state oversight of refinery maintenance schedules.

Some industry representatives fear that delaying essential maintenance could lead to dangerous incidents.

Catherine Reheis-Boyd, president of the Western States Petroleum Association said: “Legislators still fail to understand our industry or what drives high gas prices. Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands.”

Republican lawmakers voiced their opposition, with Assembly Republican Leader James Gallagher calling for adjournment before the Assembly voted on the bill.

Although Republicans proposed their own measures to lower gas prices, these initiatives were blocked in the Democrat-led Legislature.

One such proposal aimed to exempt transportation fuels from California’s cap-and-trade program but failed to gain traction.

Initially introduced in August, the legislation faced delays as Assembly members sought more time for consideration.

In response, Newsom convened a special session to expedite its passage. This is not the first time he has called lawmakers into a special session; in 2022, he sought to penalize oil companies for excessive profits.

State Senate President Pro Tempore Mike McGuire underscored the significance of the new law as part of a broader strategy to alleviate the cost of living for Californians.

He said: “This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight. I firmly believe Californians are tired of the price spikes.”

This article contains additional reporting from The Associated Press