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What is included in Gavin Newsom’s California gas price gouging bill?

Governor Gavin Newsom announced new measures to tackle oil companies that have been taking drivers for a ride in the last 12 months.

What impact would a windfall profits tax have on drivers? We took a look at the response from the gas industry as California looks to implement one.
MediaNews Group/Inland Valley Daily Bulletin via Getty ImagesGetty

New legislation in California promises to hold oil companies to account after a year of high gas prices under the guise of a foreign war.

Governor Gavin Newsom’s plan will create an independent watchdog, under the California Energy Commission (CEC), to observe gas companies and have the power to issue fines if they determine said company is artificially inflating prices.

“With this legislation, we’re ending the oil industry’s days of operating in the shadows,” beamed Newsom. “California took on Big Oil and won. We’re not only protecting families, we’re also loosening the vice grip Big Oil has had on our politics for the last 100 years.”

The legislation was produced in response to extremely high gas prices in the state towards the end of 2022. Early October saw the average price of a gallon above $6.31. With prices this high companies could make outrageous profits, with some Golden State oil producers making profits double, triple, or higher profits on the same period in 2021.

How will the bill impact oil companies?

Oil companies will need to report information about their pricing to the CEC, which will then determine appropriate action. If the companies are never fined then the legislation has done its job.

If we force folks to turn over this information, I actually don’t believe we’ll ever need a penalty because the fact that they have to tell us what’s going on will stop them from gouging our consumers,” said Rebecca Bauer-Kahan, a Democratic state representative.