California Passes Gasoline Price Gouging Law

California lawmakers passed legislation this week that will allow penalties to be imposed on fuel retailers for what California’s governor has called price gouging at the pump.

The new law was passed just a week after it was introduced as a bill at the state legislature, evidence of the determination of the state’s leadership to squeeze the oil industry from every direction it can.

“When you take on big oil, they usually roll you — that’s exactly what they’ve been doing to consumers for years and years and years,” Governor Gavin Newsom said.

“The Legislature had the courage, conviction and the backbone to stand up to big oil,” Newsom added, as quoted by Fortune.

Californians pay some of the highest prices for fuel in the United States. While the oil industry and its supporters attribute this fact to the high taxes that California slaps on fuels, Newsom and the Democrat-dominated legislature have accused the oil industry of price gouging and have vowed to put a stop to it.

California has the highest gasoline tax in the U.S. as well as additional taxes that combine to form a higher price for the end product than in other states.

“California’s price gouging penalty is simple — either Big Oil reins in the profits and prices, or they’ll pay a penalty,” Newsom said in a statement in December last year. “Big Oil has been lying and gouging Californians to line their own pockets long enough.”

The record profits that all oil companies made last year amid the oil price spike triggered by Russia’s invasion of Ukraine did not help matters, either. They only increased California’s determination to punish oil companies, including a proposal to impose a cap on the profits that these companies are allowed to make.

Per the new law, it will be up to the California Energy Commission to decide whether an oil company should be punished for the prices, at which it sells its products.

However, the more important part of the new law is that oil companies will be mandated to share copious amounts of information with a newly set up state agency, which will be responsible for monitoring and investigating California’s fuel market.

By Charles Kennedy for Oilprice.com

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