California’s governor, Gavin Newsom, has proposed a measure forcing refiners in the state to maintain a certain level of gasoline stocks in order to avoid shortages that lead to price jumps at the pump.
“Price spikes at the pump are profit spikes for Big Oil,” Newsom said in a news release. “Refiners should be required to plan ahead and backfill supplies to keep prices stable, instead of playing games to earn even more profits. By making refiners act responsibly and maintain a gas reserve, Californians would save money at the pump every year.”
The proposal follows findings by the California Energy Commission that for 63 days last year, refiners in the state maintained gasoline inventory of just 15 days of consumption, which, according to the Governor’s office, led to higher prices.
“The data is clear: oil refiners have been racking up profits by planning maintenance that reduces supply during our busy driving seasons,” the head of the CEC’s Petroleum Market Oversight division said. “The Governor’s proposal gives us new tools to require refiners to plan responsibly and prevent price gouging during maintenance,” Tai Milder added.
Big Oil has been a thorn in the side of California’s current governor for years. The industry has been blamed for the fact that Californians pay the highest gas prices in the country, for lying about climate change, and for literally existing.
Regulation and lawsuits are the two tools that Newsom has at his disposal to fight Big Oil and both are being used copiously. Last year, the governor and the state’s attorney general filed a lawsuit against Big Oil for “covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet.”
Newsom also instituted a ban on internal combustion engine powered vehicles, set to take effect in 2035.
By Irina Slav for Oilprice.com
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