(CNN) California Gov. Gavin Newsom on Tuesday signed a bill that gives the state energy commission oversight power over oil companies to determine potential price increases and impose corresponding penalties.
“Why do we pay $2.61 more per gallon for gasoline than the national average?” Newsom said Tuesday. You didn’t have to put up with these price increases, and you won’t have to in the future. We’ll cover it, and we’ll treat this issue like any other jurisdiction in this country. »
Last year, Newsom Oil companies were accused of inflating prices even in California when crude oil prices were starting to fall. In a news conference Tuesday, Newsom called it “one of the greatest robberies in modern American history.”
The new law creates a new division within the California Energy Commission (CEC) to “investigate sales and pricing activities in the industry and could refer violations to the attorney general for prosecution,” according to the governor’s office. If their office determines that there was price gouging, they can impose a penalty on the oil companies. The legislation stipulates that the amount of the fine will be determined by the commission during the investigation process.
The law would provide needed transparency to the state’s oil market and how oil companies access prices, according to members of Congress who worked on the bill.
California Senator Nancy Skinner said, “California has sent a clear message to the oil industry – open your books and prove you’re not price-gouging. Otherwise, you, Big Oil, will pay the price, not the consumers. Guardian of the law.”
“Chevron believes California deserves clean, reliable, and affordable energy,” Chevron spokesman Ross Allen said in a statement.
“But this legislation does not address the underlying production and supply issues in the California markets,” Allen said. The high energy prices that this bill seeks to address are a function of an isolated and undersupplied market for specialty gasoline blends. Time and time again, state regulators have found that high gasoline prices in California result from regulation, politics, and geography. »
The law will go into effect in 90 days, Newsom said, but it will likely take nine to 12 months to “hold” the new oath. He said this commission section was not a panacea, but he would adopt long-term solutions to ensure that Californians did not face unfair price hikes.
Last November, Newsom called for a special hearing on the “predatory pricing penalty” after previously calling on the legislature to enact a surprise tax on oil companies. The governor announced the agreement with legislative leaders on March 20 to distribute oversight authority to the CEC so it can draw up potential sanctions.
