CA Senate Passes Gas Price-Gouging Bill

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March 24, 2023 in Sacramento, CA —

The California Senate this week passed a bill to address gasoline price gouging in the state. The proposed Senate Bill X1-2 (2023-2024 1st Ex. Sess., Skinner) moves onto the Assembly next week where it’s expected to pass and be signed by the Governor.

California’s Senate Energy, Utilities, and Communications Committee met on Wednesday to discuss the proposed bill that would establish a “maximum gross gasoline refining margin”, meaning a cap on the difference between cost and sales price that gasoline refineries can charge their customers in California (essentially a cap on profits).

The proposed bill would empower the state’s Energy Commission to to establish the cap, along with penalties for violations, in order to address recent and future price gouging. As stated in the proposed legislative findings in the bill, “[f]rom August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.”

Photo of Senator Dave Min sitting behind a microphone in a business suit, speaking.
Senator Dave Min at Senate Energy, Utilities, and Communications Committee hearing on March 22.

As Senator Dave Min, conservative Democrat from Orange County, put it, “what’s become clear, as we’ve looked into this, is that this is a fundamentally broken market. And that the primary beneficiaries of this broken market has been the oil refiners.”

Photo of Lauren Sanchez testifying at hearing
Lauren Sanchez, Senior Climate Advisor to Gov. Gavin Newsom, testifying at hearing on March 22.

Governor Newsom has taken a lead on developing this legislation, even going as far as to call for this special session of the Legislature to tackle the specific topic of profiteering and price gouging in the energy industry. According to the Governor’s representative at Wednesday’s hearing, Lauren Sanchez, Senior Climate Advisor, “protecting low-income communities is at the heart of this effort.”

Far-right Democrat Marie Alavardo-Gil, recently elected to California’s newly-drawn 4th Senate District, was one of the few no votes on the measure on the Senate Floor. She was joined in opposition to the bill by seven other conservatives from the Republican Party. The measure passed the Senate floor with 30 in favor, 8 opposed, and 2 abstentions.

The bill is set to be heard in the Assembly Utilities and Energy Committee on Monday, March 27, 2023.

Jon Ivy

Jon Ivy is an attorney and analyst in Sacramento, CA who writes regularly about California's government.