California lawmakers on Thursday will vote on whether to allow penalties on oil companies for price gouging at the pump, a first-in-the-country proposal aimed at stopping the kind of spikes last summer that caused some drivers pay up to $8 per gallon as the industry reaped super-sized profits.
Gov. Gavin Newsom, a Democrat seen as a possible presidential candidate beyond 2024, has used all of his political muscle to get the bill this far by making in-person pleas with state lawmakers in private ahead of Thursday’s first vote in the state Senate.
The oil industry has pushed back, paying for a wave of digital ads that have labeled any potential penalty as a tax — an idea more likely to be scorned by voters. But they have failed to stop the bill, which after months of stagnating in the Democratic-controlled Legislature is now racing through the process with the Senate vote followed by a final vote in the state Assembly likely next week.
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The bill highlights the challenges of balancing the competing pressures of protecting consumers at the pump while at the same time pushing policies to end the state’s reliance on fossil fuels. California’s climate strategy — which includes banning the sale of most new gas-powered cars by 2035 — would reduce demand for gasoline by 94% by 2045.
California’s gasoline prices are already higher than most other states because of taxes, fees and environmental regulations. California’s gas tax is the second-highest in the country at 54 cents per gallon. And the state requires oil companies make a special blend of gasoline to sell in California that is better for the environment but is more expensive to produce.
Still, at one point during the price spike last year the average price of a gallon of gasoline in California was more than $2.60 higher than the national average — a difference regulators say is too large to be explained by taxes, fees and regulations.
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