Governor Gavin Newsom wants to penalize oil companies for price gouging, and he's hoping the special legislative session that started Monday will back him.
“They’re screwing you! They’re taking advantage because they think they can and we’re going to say ‘enough!’” said the governor.
Newsom alleges the oil companies took in $63 billion in profits just in a recent 90-day period. Now, gas prices in California always top the national average due to taxes, fees and environmental regulations that other states don’t have, but those whopping profits pushed Newsom to act.
“Six dollars and 42 cents is what you were paying a few months ago,” he said. “Six dollars and 42 cents! Two dollars and 61 cents more than the national average, $2.61! There’s no justification. None,” he said.
Get a weekly recap of the latest San Francisco Bay Area housing news. Sign up for NBC Bay Area’s Housing Deconstructed newsletter.
The governor said his people and lawmakers will work out details. Such as what the cap should be on profits , what the fine should be and who gets that money. The Western States Petroleum Association denies price gouging and said higher prices are the result of a number of factors.
“Supply and demand, the high cost of doing business in California and the public policies we’ve seen implementing over the past several years that really discourage energy that is affordable to California,” said Kevin Slagle of the Western States Petroleum Association.
Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business, says the proposal could keep big oil from increasing prices, but then again, “If we have a real shortage, a couple of refineries have disruptions, and they don’t raise prices – we are more likely to get gas lines.”
Lawmakers will reconvene in January to consider the penalty, which requires only a majority vote to pass.
The Governor is being careful today to no longer call it a tax, which would require 2/3 approval.
