Golden State Today

Governor Newsom convenes special session to prevent gas price spikes, save Californians money at the pump

Aug 31, 2024

SACRAMENTO – Today, Governor Gavin Newsom called for a special session of the Legislature to address the problem of gasoline price spikes and save Californians hundreds of millions of dollars annually.

Price spikes on consumers are profit spikes for oil companies, primarily caused by refiners not backfilling supplies during maintenance. If this proposal had been in effect last year, Californians could have saved hundreds of millions — if not billions — of dollars at the pump, according to an analysis by the Division of Petroleum Market Oversight (DPMO).

“It should be common sense for gas refineries to plan ahead and backfill supplies when they go down for maintenance to avoid price spikes. But these price spikes are actually profit spikes for Big Oil, and they’re using the same old scare tactics to maintain the status quo. We look forward to working with our Legislative partners during the special session to act on this urgently needed legislation. Calling the session now allows the Legislature to begin that work immediately so that the state can resolve this important matter to establish the necessary rules to prevent price spikes next year and beyond,” said Governor Gavin Newsom.

The Governor’s special session will focus on passing his plan to save Californians money at the pump. It would authorize the California Energy Commission (CEC) to require petroleum refiners to maintain a minimum inventory of refined fuel throughout the distribution chain to avoid supply shortages that create higher prices at the pump for consumers. It would also authorize the CEC to require refiners to plan for resupply during scheduled refiner maintenance.

Following gasoline price spikes in 2022, Governor Newsom called for a special session and worked with the Legislature to sign into law reforms holding Big Oil accountable. California’s new watchdog found that higher gasoline prices were caused by a suspicious market transaction, refinery maintenance without proper preparation, and more.

In January of this year, the watchdog sent Governor Newsom and the legislature a letter outlining specific proposals to reform California’s gasoline spot market, including a minimum inventory requirement.

The state’s gasoline price watchdog also found that in 2023, gasoline prices spiked largely due to refineries going offline without adequately planning to backfill supplies. This caused refining margins to spike as spot and retail prices jumped — indicating that refinery margins made up most of the price spikes between July and September 2023.

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