Last Dec., Calif. Gov. Newsom convened a special legislative session, demanding a price-gouging penalty on major oil companies. “California’s price gouging penalty is simple – either Big Oil reins in the profits and prices, or they’ll pay a penalty,” he said in a statement.
Senator Nancy Skinner (D-Berkeley), chair of the California Senate Budget Committee, introduced the legislative proposal to impose a price-gouging penalty on big oil firms. “High profits alone are not an indication that oil companies targeted California,” according to her. “But there’s no denying that California’s gas prices last summer were $2.60 a gallon higher than any other state. There is no legitimate explanation for that. It’s also true that those high prices contributed to the windfall profits.”
This Monday, Consumer Watchdog noted that a California refiner, Marathon Petroleum, reported profits of 75 cents per gallon for 2022. Such profits indicate that Marathon Petroleum is “virtually doubling what it made the year before, strengthening the case for the California legislature to enact a windfall profits penalty,” according to a Consumer Watchdog statement.
Meanwhile, gas prices have been dropping in California, as inflation, or a general rise in prices, is easing.
How long it will take legislators on the 18-member Senate Committee on Energy, Utilities, and Communications to move forward or not on the governor’s price-gouging penalty on major oil companies is unclear. As proposed, this penalty would return part of their profits to consumers in the form of rebates, with many details on that process unclear.
Democratic Sen. Steven Bradford is the chair of the California Legislative Black Caucus, Chair of the Senate Committee on Energy, Utilities, and Communications, representing the Los Angeles County communities of Carson, Compton, Gardena, Harbor City, Hawthorne, Inglewood, Lawndale, Lennox, San Pedro, Torrance, Watts, Willowbrook, and Wilmington.
GOP Sen. Brian Dahle is the vice chair of the same committee, representing California's 1st Senate District that contains all or parts of 11 counties, from Alpine, El Dorado, Lassen, Modoc, Nevada, Placer, Plumas, Sacramento, Sierra, Siskiyou to Shasta.
There are 4 Republicans and 14 Democrats on the Senate Committee on Energy, Utilities, and Communications. There is no scheduled date for this committee to meet next.
In the meantime, Consumer Watchdog has recommended penalties begin after profits of 50 cents a gallon, as the Legislature is considering a bill, SBx12 (Skinner-D), to enact a windfall profits cap on how much oil refiners can make in profit per gallon of gasoline.