California Senate approves Newsom’s anti-price gouging bill targeting oil refiners

Gavin Newsom
California Gov. Gavin Newsom announces a partnership with Civica Rx during a visit to a Kaiser Permanente warehouse in Downey, Calif., on Saturday, March 18, 2023. Damian Dovarganes/AP

California Senate approves Newsom’s anti-price gouging bill targeting oil refiners

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The California Senate passed a bill equipping state authorities to investigate and penalize oil refiners for high gas prices, advancing the anti-price gouging legislative push Gov. Gavin Newsom (D-CA) initiated in response to the spike in fuel prices last summer.

Newsom has accused refiners operating in the state, including Chevron and Phillips66, of gouging drivers and sought for months to advance legislation that would penalize them after retail fuel prices reached a record high last summer.


The bill passed Thursday, which must pass the Democratic-led state Assembly before heading to Newsom’s desk, would establish a new watchdog agency within the California Energy Commission designed to keep an eye on oil and fuel markets. It also enables the commission to impose civil penalties on refiners charging above a “maximum allowable margin” for the price of gasoline, although they would have to be implemented via public rulemaking.

The bill also includes new reporting requirements for refiners and gives the watchdog subpoena power over data and records, and it enables the agency to refer violations of law to the attorney general.

“For decades, oil companies have gotten away with ripping off California families while making record profits and hiding their books from public view,” Newsom said in a statement Thursday. “With this proposal, California leaders are ending the era of oil’s outsized influence and holding them accountable.”

The bill is a dialed-back version of what Newsom originally sought to implement.

An initial proposal he promoted with Democratic state Sen. Nancy Skinner, which they announced in December in conjunction with the start of the special legislative session Newsom ordered to deal with refiners’ large windfall profits, would have effectively made it illegal for petroleum refiners to earn above a “maximum gross gasoline refining margin” calculated on a per-gallon basis.

Some lawmakers, including some Democrats, opposed that version and said they worried the legislation could make gasoline more scarce if refiners exit the state or sell gasoline elsewhere rather than operate under the new limits.


Refiners have blamed Newsom, state environmental regulations, and taxes as responsible for driving up the cost of fuel.

President Joe Biden also criticized oil companies and refiners last year for high earnings and called on Congress to pass a windfall profits tax.

© 2023 Washington Examiner

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