California Governor Gavin Newsom signed a new law on Monday aimed at preventing gas prices from spiking, marking his latest move in a long-running battle with the oil industry over energy costs and climate change impacts.
Californians have been paying the highest gas prices in the country due to taxes and environmental regulations. As of Monday, the average price for regular unleaded gas in California was about $4.68 per gallon, compared to the national average of $3.20, according to AAA.
This new legislation comes in response to findings from the state’s Division of Petroleum Market Oversight, which indicated that gas price spikes are mainly driven by increases in global crude oil prices and unexpected refinery outages. The law gives energy regulators the power to require refineries to maintain a certain amount of fuel in reserve. The idea is to help stabilize prices during times when refineries have to go offline for maintenance. Supporters of the bill believe it could save Californians billions of dollars at the pump.
Newsom joined lawmakers at the state Capitol to sign the bill into law, taking the opportunity to criticize the oil industry for trying to block the measure.
“They continue to lie, and they continue to manipulate,” Newsom said. “They have been raking in unprecedented profits because they can.”
The signing of the bill comes just weeks ahead of the November election, but Newsom insisted that the law wasn’t about politics. He still has two years remaining in his second term.
Critics of the law argue that it could unintentionally increase overall gas prices and pose safety risks by giving the state more control over refinery maintenance schedules. One vocal opponent was Republican Assembly Minority Leader James Gallagher.
“All this bill really does is create a whole new bureaucracy that’s going to come up with regulations maybe sometime in the next six months,” Gallagher said.
There are also concerns that delaying necessary maintenance could lead to accidents.
“Legislators still fail to understand our industry or what drives high gas prices,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association, in a statement. “Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands.”
Gallagher made a motion for lawmakers to adjourn before the Assembly voted to send the bill to Newsom’s desk on Monday. Meanwhile, Republicans had introduced their own proposals to lower gas prices, but those efforts were blocked in the Democrat-controlled Legislature. One of the rejected bills would have exempted transportation fuels from the state’s cap-and-trade program.
Newsom first unveiled the legislation in August, during the final week of the regular legislative session. However, lawmakers in the Assembly said they needed more time to consider it, which led the governor to call a special session to get it passed.
CBS Sacramento’s Steve Large asked Newsom about the struggle to get this bill signed into law.
“Today, you required 41 votes to get this bill passed. You got 42, a very slim majority,” Large pointed out. “What kind of political message does that send to California?”
Newsom responded, “I don’t have that capacity of objectivity. I just know this is a Legislature that gets it and gets things done.”
Notably, 21 lawmakers chose not to vote on the bill. Of the 16 votes against it, three came from Democrats.
This isn’t the first time Newsom has taken on the oil industry. In 2022, he called a special session to pass legislation aimed at penalizing oil companies for making excessive profits.
State Senate President Pro Tempore Mike McGuire emphasized that the new law is just one part of California’s broader effort to lower the cost of living.
“This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight,” McGuire said. “I firmly believe Californians are tired of the price spikes.”
