Gov. Gavin Newsom proposes price gouging penalty on oil companies
Gov. Gavin Newsom will call a special session of the state legislatures, hoping to pass a so-called price gouging penalty on oil companies.
"Compared to Arizona and Texas, it's bad," said collegiate soccer player Orlando Valencia.
According to Consumer Watchdog, the five largest oil refineries quadrupled their profits through the first nine months of this year. In 2021, the companies reported $17 billion in profits compared to $67 billion in 2022.
Due to these windfall profits, the governor's proposal has garnered support from organizations like Consumer Watchdog.
"This is basically saying 'We're going to cap these profits and we're going to return them," said the organization's President Jamie Court. "It's only on the refining because that's where we're getting bludgeoned."
During Tuesday's California Energy Commission hearing on the recent price spikes, the five largest oil refineries did not make an appearance, opting instead to be represented by the Western States Petroleum Association.
"Any fee imposed by the government is essentially a tax," said WSPA Vice President Kevin Slagle. "We can call it whatever we want."
With prices still far higher than the national average, Newsom ordered refineries to switch to the less costly winter blend, in September, earlier than normal.
Despite the move, a gallon of gas in Los Angeles County averaged about $4.97, according to AAA. This is 43% higher than the national average of $3.47. In Southern California as a whole, residents paid $2.61 more than the national average in October.
WSPA blamed the market forces, regulations and programs set by Newsom for the high prices.
"His stated goal is to rid California of our industry and our people," said Slagle.
No matter where the blame falls, the high prices have made it difficult for drivers like Valencia to juggle work and his athletics.
"When the season's here, I could hardly work," he said. "That's why gas prices should have a cap."
Few details of the governor's proposal have been shared so far. However, his office says the recouped profits would be redirected back to taxpayers.
