The state passed a law in 2023 to curb price spikes, but regulators have delayed implementing the rules as refineries close and global conflicts drive up prices.
By Staff Writers, LOS ANGELES TODAY
Three years ago, California passed a landmark law giving regulators the power to cap refinery profits and penalize oil companies for price gouging. But the law has never been used, and last year the California Energy Commission voted to delay the rules for five years. Now, with gas prices topping $5.30 a gallon statewide, the decision is under new scrutiny as the U.S. war with Iran sends global oil prices soaring. Proponents say this is precisely the moment the 2023 law was designed for, but those who backed the delay argue it was a necessary concession to avoid driving refiners out of the state entirely.
WHY IT MATTERS
California has a structural problem with fewer refineries, a captive market, and no easy outside supply options. When prices rise nationally, they can rise even more in the state. The unused gas price tools were meant to protect consumers, but the delay has left California vulnerable to global oil shocks and price spikes.
THE DETAILS
The 2023 law gave regulators the power to cap refinery profits and penalize oil companies for price gouging. But the California Energy Commission voted last year to delay the rules for five years, citing concerns about driving refiners out of the state. Now, with gas prices spiking due to the U.S. war with Iran, proponents say this is the moment the law was designed for, while those who backed the delay argue it was a necessary concession.
- In 2023, the California legislature passed a law giving regulators new powers to curb gas price spikes.
- In August 2025, the California Energy Commission voted to delay implementing the rules from the 2023 law for five years.
- In March 2026, gas prices in California topped $5.30 per gallon statewide amid the U.S. war with Iran.
WHAT THEY’RE SAYING
“These are the moments we need them, because when the price of a commodity goes through the roof — be it crude oil or refined gasoline — that’s when companies make outrageous profits.”
— Jamie Court, President, Consumer Watchdog (lostcoastoutpost.com)
“The last thing we need is to start trying to regulate refinery margins. As much as people don’t like high gasoline prices, they really, really hate gas lines.”
— Severin Borenstein, Energy Economist, UC Berkeley (lostcoastoutpost.com)
WHAT’S NEXT
The California Energy Commission has left the door open to rescinding the five-year delay on the profit-cap rules if they change their minds, which could happen if gas prices continue to spike.
