Making California First State In America To Rein In Oil Refiner Greed and Profiteering
Los Angeles, CA – Governor Newsom and California legislature leaders have reached a deal to push through a new oil refiner accountability law including a price gouging penalty before the legislature adjourns on April 1.
“This is a landmark deal that will give California power to stop the price gouging at the pump that has plagued Californians for decades,” said Jamie Court, President of Consumer Watchdog. “This will make California the first state in the nation to have the power to impose a price gouging penalty on refiners and to demand this level of transparency from them.
“The Governor and legislature are to be congratulated on a deal that gets needed information into the hands of regulators to prevent the price spikes that have targeted Californians and to arm the regulators with the power of penalty when price gouging occurs,” said Court. “This legislation will give regulators the ability to see behind the curtain of gasoline pricing in California and to punish oil refiners when they profiteer off Californians. The California Energy Commission will need to be on its game and Consumer Watchdog will be there to make sure it carries out these vital new functions effectively and efficiently.”
The agreement includes:
• A price gouging penalty on oil refiners when they make too much money per gallon at a level to be determined in a rule making by the California Energy Commission.
• New transparency over refinery shutdowns, transactions that compose the crucial spot market where retail prices are set, export and import activity, pipeline activity, and other aspects of the industry that have been shielded from regulators for too long.
• A new division of the California Energy Commission dedicated to monitoring the market on a daily basis.
Among the most important provisions of the legislation, SBx1 2, is the new ledger to be kept for transactions on the gasoline spot market. Regulators will have to be informed of all trades to make sure the crucial spot market — where the price retailer pay oil refiners for the gas is set — is not manipulated. For more on the spot market read Consumer Watchdog’s recent LA Times commentary.