California Governor Proposes Plan to Stabilize Gas Prices
California Governor Gavin Newsom has recently unveiled a plan aimed at stabilizing gas prices in the state. The proposal requires petroleum refiners to maintain a minimum fuel reserve to prevent price spikes caused by maintenance downtime. While the details of the plan are not yet clear, it is expected to save drivers hundreds of millions of dollars annually.
High Gas Prices in California
California is known for having some of the highest gas prices in the United States. According to AAA, the average price for regular unleaded gasoline in the state is $4.598 per gallon, which is $1.187 higher than the national average. Only Hawaii has more expensive gas, with an average price of $4.656 per gallon.
The Governor’s Proposal
Governor Newsom’s proposal aims to address the issue of price spikes and save money for Californians. Under the plan, the California Energy Commission (CEC) would have the authority to require refiners to maintain a minimum fuel reserve to prevent supply shortages and subsequent price increases for consumers.
The proposal comes in response to the commission’s findings that refiners maintained less than 15 days of supply for 63 days in 2023, leading to increased prices and significant profits for oil companies.
Potential Impact and Opposition
While specific details and penalties for non-compliance are yet to be determined, the Governor’s office claims that the proposal could have saved Californians over $650 million in gas costs if it had been in effect last year.
Governor Newsom stated that price spikes at the pump result in profit spikes for big oil companies. He believes that refiners should be required to plan ahead and maintain a gas reserve to stabilize prices, rather than taking advantage of maintenance downtime to increase profits. However, the Western States Petroleum Association’s CEO criticized the plan, calling it a political attack on consumers and the industry.
Overall, the proposal aims to address the issue of high gas prices in California and prevent price gouging during maintenance periods. By requiring refiners to maintain a fuel reserve, the plan seeks to provide stability and savings for consumers.
