California battles gas price gouging but did the law serve its purpose?

Gas prices in California have long been a headache. Add in accusations of price gouging and a high-profile law to stop it, and you’ve got a political powder keg. In 2023, state leaders passed a law aimed at holding oil companies accountable when prices surged.

Now, two years on, the law’s defenders say it’s working – but the receipts are missing, and some Californians are left wondering if anything really changed.

What did the gas price gouging law actually do?

Governor Gavin Newsom and Senator Nancy Skinner were clear in their aim: call out the oil industry, cap profits if necessary, and bring prices down for regular drivers. The bill created a state watchdog division and gave the California Energy Commission (CEC) new powers to monitor the industry and penalize profiteers. Companies were ordered to hand over monthly data on profit margins and sales. The CEC, in turn, had 45 days to make that information public.

For a while, that data flowed. But then, sometime after April 2024, the updates stopped.

According to the CEC, the reason is data quality: reports from oil refiners have been inconsistent, confusing, and in many cases, flat-out unusable. One agency note even admitted that refiners’ numbers were “likely not accurate nor reliable.” And it wasn’t just a bureaucratic hiccup – energy economists backed that up. “Completely implausible,” said UC Berkeley’s Severin Borenstein of the numbers companies submitted.

Despite the dramatic framing in 2022 and 2023 – when California’s gas prices were soaring and oil companies were making record profits – the state hasn’t penalized a single refinery for gouging under the new law. In fact, some refiners posted negative margins for months, losing money on every gallon sold between late 2023 and early 2024.

That said, officials have claimed the existence of the law a success, claiming it helps flatten price spikes and reduces the average cost at the pump. By forcing refiners to keep backup plans means sudden gaps aren’t faced, they argue.

But two years after its headline-grabbing debut, California’s gas price gouging law is stuck in a fog of incomplete data and untested enforcement. State leaders insist it’s already saved drivers money. Critics argue the numbers don’t back that up – and maybe never will.

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