Join CRA TODAY!
There is no “US” Without You!
Thank you for visiting us here at the online headquarters for THE CALIFORNIA REPUBLICAN ASSEMBLY.
If you find value in the work we are doing to help fight for conservative values here in the Golden State, PLEASE BECOME A MEMBER TODAY!
By Katy Grimes
OPINION (CALMATTERS) – Why is gas more than $5 gallon in California and not across the country if “Big Oil” is so greedy?
California Governor Gavin Newsom called for a special legislative session after accusing California’s oil refineries of price gouging. The governor claimed that “Gas price spikes on consumers are profit spikes for oil companies, and they’re overwhelmingly caused by refiners not backfilling supplies when they go down for maintenance.”
“Why would the people serving the people of California do something that would benefit the people of California?” a Capitol friend asked after the Petroleum & Gasoline Supply Committee passed Gov. Gavin Newsom’s ABX2 to impose new mandates for oil storage requirements on oil refineries in California.
The hearing was held right after Thursday’s press conference by California Fuels and Convenience Alliance, small businesses, and small family-owned businesses opposing Governor Newsom’s attempt to control fuel pricing.
“Last week, under the demand of Governor Newsom, the California State Assembly began their special session on fuel and energy costs, discussing ABX2-1 (formerly known as SB 950),” the CFCA said. “This bill under review will give the California Energy Commission (CEC) more authority to impose new mandates for oil storage requirements on oil refineries in California.”
“California is on the verge of an energy crisis with the push for electrification by 2035,” said John Kabatek, California State Director, National Federation of Independent Business. “The regulation requirements in ABX2-1 will artificially create a fuel shortage crisis due to limiting the distribution of fuel.”
“This will unavoidably increase the demand, causing prices to increase.”
Indeed.
As the Globe recently reported:
Gov. Gavin Newsom’s California Energy Commission regulators announced earlier this month proposed government controls of the petroleum industry, ostensibly in order to combat future energy price surges. This followed Chevron Oil company’s announcement that it will be moving its headquarters to Houston Texas from San Ramon California.
As the California Legislature was wrapping up its 2023-2024 session at the end of August, Gov. Newsom threatened to call a special session if lawmakers didn’t pass his Venezuela-Like price controls proposal of the oil and gas industry.
According to Newsom, who is sounding more like Hugo Chavez:
“The state has found that, when refiners limit gasoline supplies, prices spike at the pump and create massive profits for Big Oil. Today, Governor Gavin Newsom announced a new, first-in-the-nation proposal to further prevent price spikes and save Californians money.
Newsom’s proposal would authorize the California Energy Commission (CEC) to require that petroleum refiners maintain a minimum fuel reserve to avoid supply shortages that create higher prices for consumers. If this proposal had been in effect in 2023, Californians would’ve saved upwards of $650 million in gas costs due to refiners’ price spikes.”
No mention in Newsom’s proposal of California’s highest-in-the-nation gas taxes…
As Ed Ring reported for the Globe this week:
…much of the high price for gasoline in California is caused by higher taxes. In July 2024, when the average price per gallon in California was $4.49, state taxes, fees, and programs added $1.23 to the price, along with another $0.18 of federal excise tax. The cost of crude oil added $2.04 and “industry costs and profits” added $1.04. Included in that last number are not only refinery operating costs, but also distribution and marketing costs.
California’s state government collects corporate income tax on oil company profits, which adds to the $1.23 they collect in direct taxes and fees on a gallon of gas. So one may ask, since our governor is so concerned about California’s consumers getting gouged at the pump, why the amount the state collects on every gallon of gasoline is grossly in excess of not only industry profits (before taxes), but profits plus total operating costs. Who, then, is gouging who?
As the Globe has asked repeatedly, “If the ‘Big Oil’ companies are so greedy, why are they only greedy in California and not greedy in every state?”
