Gov. Gavin Newsom (D-CA) has spent the last several years blaming price gouging from oil companies for the high gas prices in his state. Unsurprisingly, it is his own policies that were jacking up prices all along.
Michael Mische of the University of Southern California’s Marshall School of Business looked at gas prices over the past 50 years to determine what caused price increases. He determined that it wasn’t greedy oil executives lining their own pockets but California’s strict regulations, which include environmental regulations that mandate a particular blend of gasoline that is not widely produced, leading to a supply shortage. They also include the Cap-and-Trade Program, which led to prices rising rapidly in 2015, according to Mische, and widened the gap between California prices and the national average.
This isn’t groundbreaking, of course. California has lost 10% of its refining capacity since 2019, with Phillips 66 recently announcing it would shutter its Los Angeles refinery. California is down to eight refineries, and that number is only going to decline. On top of this, California has the highest gas tax in the country, and California’s excessive regulations on insurance, housing, and the minimum wage (among other things) lead to the cost of everything in the state increasing, including gasoline.
Newsom has tried to put all the blame on oil companies, and California Democrats passed a price gouging law after complaining about the state’s continuously increasing prices. Newsom’s team is even boasting that the law has helped avoid major price spikes since the last major one in 2022. And yet, according to the Sacramento Bee, “The state hasn’t leveled any penalties on oil refining companies since the law passed and has even stopped posting the data it required.”
Price gouging is to blame, according to Newsom and California Democrats. They just can’t actually prove it.
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Newsom and his party have to pretend that nefarious wealthy executives are arbitrarily increasing prices only in California because otherwise, they would need to admit their policies make the state unaffordable. Newsom’s 2028 presidential run will rely on voters not tying all of California’s problems to his failed policies, so he’ll have to punt the blame to whatever “Big Oil” villains he can find.
California Democrats try to regulate industries into the dirt and are surprised when the basic laws of economics still apply. The state’s onerous regulations are what is pricing its residents out of the California dream, and only Newsom and his Democratic colleagues are to blame for that.