In a bid to control escalating gas prices, California Governor Gavin Newsom (D) has signed into law a bill that empowers his administration to regulate the state’s dwindling oil refineries. The move underscores California’s ongoing battle with affordability.
What Happened: Newsom approved the ABX 2 1 bill. The legislation mandates oil companies to prevent price surges due to maintenance issues and low supplies. The signing of the bill marks a decline in the political clout of Big Oil in California, a state actively transitioning from fossil fuels to renewable energy sources, reported Politico.
“They have been raking in unprecedented profits because they can,” said Newsom, according to the report. The governor said that the proposal was not about politics, but took the opportunity to take a potshot at Republican Presidential candidate Donald Trump. He said the industry was raising gas prices to “scare voters” into backing the ex-president.
Western States Petroleum Association CEO Cathy Reheis-Boyd said about the move by California, “For those ready to stop playing politics, we welcome the opportunity to address the real issues driving fuel prices higher for Californians and their families.”
Western States Petroleum Association includes companies such as ExxonMobil, Marathon Petroleum, and HFSinclair.
Set to come into effect in January, the law aims to curb price spikes that have seen the state’s average gas price exceed $6 per gallon in the past two years. It authorizes the California Energy Commission to require refiners to store more gas and share resupply plans with the state.
Why It Matters: The new law comes in the wake of rising concerns over gasoline prices in California. In September 2023, Tai Milder, the director of California’s Division of Petroleum Market Oversight, expressed concerns over some refineries’ failure to maintain adequate gasoline levels or import enough fuel to compensate for production shortfalls.
Furthermore, the state has been taking legal action against major oil companies. Last year, California initiated a lawsuit against Exxon Mobil Corporation, Shell PLC, BP P.L.C., ConocoPhillips, Chevron Corporation, and the American Petroleum Institute. The state accused these companies of concealing the dangers of fossil fuels for decades, leading to significant climate change-related damages.
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This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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