Governor Newsom signs legislation to prevent gas price spikes and save Californians money

“With this new law, major oil companies are now responsible for stabilizing prices at the pump. It is a crucial achievement, but our work is not yet done. “I will continue to fight to lower the cost of living because housing, food and everyday essentials must become more affordable for all Californians.” — Assembly Speaker Robert Rivas (D-Salinas)

“Today we come together to provide needed relief at the pump and help keep hard-earned dollars in Californians’ pockets. I am grateful to Governor Newsom, Speaker Rivas, and members of the Senate and Assembly for their swift action on this critical matter. Nevertheless, our work does not stop. We remain committed to reducing the cost of living for people in all parts of the Golden State. It’s a necessity.” – Senate President pro tempore Mike McGuire (D-North Coast)

Why it is needed

Price spikes at the pump are profit spikes for oil companies and are largely caused by refineries failing to replenish their supplies when they are down for maintenance. If this proposal had been enacted last year, Californians could have saved hundreds of millions – if not billions – of dollars at the pump, according to an analysis by the Division of Petroleum Market Oversight (DPMO):

Experts have advocated for the measure, including Stanford economists who praised the proposal as an “economically sound policy that specifically addresses an important problem” and “the additional supply would free up refining capacity to serve Nevada and California.” Arizona is also reducing prices in these markets.”

Supporters of the bill include mayors, local politicians, consumer organizations, environmentalists, workers, business leaders and consumer groups. Last month, the governor and his supporters met and discussed how spikes in gas prices are impacting the everyday lives of millions of Californians and shared why this plan will help California families.

How we got here

The governor called a special session to focus on saving Californians money at the pump. The proposal authorizes the California Energy Commission (CEC) to require petroleum refineries to maintain a minimum inventory of refined fuel throughout the distribution chain to avoid supply shortages that result in higher prices at the pump for consumers. It also authorizes the CEC to require refineries to schedule resupply during scheduled refinery maintenance. The text of the proclamation calling for a special session is available here.

Following the 2022 gas price spike, Governor Newsom called a special session and worked with the Legislature to enact a reform package that would hold oil companies accountable.

The new California regulator found that the higher gasoline prices were caused by a suspicious market transaction, refinery maintenance without adequate preparation and more.

In January of this year, the regulator sent a letter to Governor Newsom and the Legislature outlining specific proposals to reform California’s spot gasoline market, including a minimum inventory requirement to prevent price spikes due to a lack of stable supply.

The state gasoline price watchdog agency also found that gasoline prices skyrocketed in 2023 primarily as refineries went offline without adequate planning to replenish supplies, causing refining margins to skyrocket Spot and retail prices rose – suggesting that refining margins accounted for the largest share of the price spikes between July and September 2023.

Gathering of experts, community leaders and consumer advocates

The Governor also announced today his appointments to the Independent Consumer Fuels Advisory Committee:

Martha Dina Arguello of Los Angeles has been appointed to the Independent Consumer Fuels Advisory Committee. Arguello has been executive director of Physicians for Social Responsibility – Los Angeles since 2007. From 1999 to 2007, she was director of health and environmental programs at Physicians for Social Responsibility – Los Angeles. Arguello is co-founder and co-chair of Standing Together Against Neighborhood Drilling and Californians for a Health and Green Economy. She is a member of the California Air Resources Board AB 32 Environmental Justice Advisory Committee and the Steering Committee of Californians for Pesticide Reform. This position does not require Senate confirmation and pays $100 per day. Arguello is a Democrat.

Michael Jorgenson of Mill Valley has been appointed to the Independent Consumer Fuels Advisory Committee. Jorgenson has served as an Assistant Attorney General in the California Department of Justice, Office of the Attorney General since 2018. From 2017 to 2018, he served as Deputy County Counsel IV in the Marin County Counsel’s Office. Jorgenson served in various capacities in the California Department of Justice, Office of the Attorney General from 2003 to 2017, including Assistant Attorney General in the Public Rights Division, Senior Assistant Attorney General in the Civil Division, and Assistant Attorney General in the Civil Division. He was an associate at Berman Tabacco from 2001 to 2003 and at Kelly Gill Sherburne & Herrera from 1999 to 2001. He earned a Juris Doctor degree from the University of San Francisco School of Law and a Bachelor of Arts in economics and history from the University of Michigan. This position does not require Senate confirmation and pays $100 per day. Jorgenson is a Democrat.

Neale Mahoney of Stanford has been appointed to the Independent Consumer Fuels Advisory Committee. Mahoney has been a professor of economics at Stanford University since 2020. From 2022 to 2023 he was a special adviser on economic policy in the White House. From 2013 to 2020, Mahoney was a professor of economics at the University of Chicago. He earned a Doctor of Philosophy in Economics from Stanford University and a Bachelor of Science in Applied Mathematics and Economics from Brown University. This position does not require Senate confirmation and pays $100 per day. Mahoney is a Democrat.

Deborah “Debbie” Meeks of Walnut Creek has been appointed to the Independent Consumer Fuels Advisory Committee. Meeks has been the United States West Coast Policy Manager and Business Coordinator at Shell USA since 2021. From 2017 to 2021, she was manager of alliances and portfolios at Shell US Retail. Meeks was regional manager for the Americas and Mexico, principal account manager and senior account manager at Shell Catalysts and Technologies from 1995 to 2017. She earned a Bachelor of Science in chemical engineering from California State University, Long Beach. This position does not require Senate confirmation and pays $100 per day. Meeks is a Democrat.

Norman Rogers of Santa Ana was appointed to the Independent Consumer Fuels Advisory Committee. Rogers has been second vice president at United Steelworkers Local 675 since 2021 and oil transportation facility operator at Marathon Petroleum Corporation since 2018. From 2013 to 2018, he was an oil transportation facility operator at the Tesoro refinery. Rogers was a member of the Carson Refinery Fire Department from 2001 to 2021. He was an oil movement plant operator at BP from 2001 to 2013 and at the Arco refinery from 1999 to 2001. This position does not require Senate confirmation and compensation is $100 per day. Rogers is registered with no party preference.

Astrid Zuniga of Modesto was appointed to the Independent Consumer Fuel Advisory Committee. Zuniga has served as president of United Domestic Workers/AFSCME 3930 since 2024 and was vice president from 2016 to 2024. She has served as Executive Secretary/Treasurer of the Stanislaus and Tuolumne Central Labor Council since 2013 and as an In-Home Support Services Caregiver since 1998. Zuniga is a member of the Board of Directors of the California Democratic Party and the Women’s Advisory Committee of AFSCME International. This position does not require Senate confirmation and pays $100 per day. Zuniga is a Democrat.