This comes three weeks after Newsom called a special session during the final week of the legislature鈥檚 regular session on Aug 31.
The proposal, introduced as by Democratic Assembly members Cecilia Aguiar-Curry of Winters and Greg Hart of Santa Barbara, would require oil refiners to maintain minimum fuel inventories to prevent shortages, and in turn, price spikes.
鈥淲hen gas prices spike because of supply constraints, everyday Californians suffer and the oil industry profits,鈥� Hart said in a statement. 鈥淭his legislation will protect California consumers by ensuring refineries maintain a stable fuel supply.鈥�
According to GasBuddy, the average cost per gallon of gas in California is approximately $4.70, about a dollar and a half above the national average at $3.20.
Last week, the state鈥檚 Division of Petroleum Market Oversight warned consumers, saying it expects gas prices to spike this month, especially in Northern California. Department Director Tai Milder said crude oil prices are decreasing, so gas should be cheaper to produce. But dwindling fuel inventories due to refinery maintenance are having the reverse effect, he explained.
鈥淧roduction is being impacted by these refinery outages,鈥� Milder said. 鈥淭hey're not bringing in resupply during production and there's not enough storage, so these are in our view the root causes for these price spikes.鈥�
The oversight division was born out of last year鈥檚 special session to bring transparency to California鈥檚 gas market. Milder said it supports the administration鈥檚 plan to alleviate high costs.
Jaime Court with Consumer Watchdog has studied California鈥檚 gas market for decades and said rising prices during a time of low inventory lead to higher profit margins for oil refiners. The organization also supports the proposal.
鈥淩efiners' tendency is to keep us running on empty so that when something goes wrong at a refinery their prices go up and their profits go up and we're just sick of that,鈥� Court said.
But Assembly Republicans want a different approach. Last week, the caucus introduced a package of bills directed at California policies regulating the oil industry鈥檚 operations in the state.
Among the bills are by Assemblymember Tom Lackey of Palmdale, which would suspend California鈥檚 gas tax. by Assemblymember James Gallagher would exempt gas from the state鈥檚 Cap and Trade program. Finally, by Assemblymember Joe Patterson of Roseville would block new regulations for the state鈥檚 low carbon fuel standard.
Patterson acknowledged the bills have little chance of moving forward with a Democratic supermajority.
鈥淚 know the prospects of them are pretty slim but we have to propose solutions that Californians can take a look at,鈥� Patterson said.=
Cathy Reheis-Boyd, president of the Western States Petroleum Association, said the GOP legislation is worth considering. She warned that Newsom鈥檚 proposal won鈥檛 bring prices down.
鈥淓ven discussing a minimum inventory level at a refinery takes away the operational flexibility that allows fuel to go to market,鈥� Reheis-Boyd said. 鈥淚t will have the absolute opposite effect.鈥�
While Assembly lawmakers begin hearings this week, the Senate has yet to convene for the special session. The proposal would have to pass both chambers to be enacted this fall.
Copyright 2024 CapRadio