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Newsom signs law allowing California to penalize oil companies for ‘price gouging’

California will soon be able to penalize oil companies involved in “price gouging” practices after Gov. Gavin Newsom, a Democrat, signed such a bill into law on Tuesday night.

“We’ve proven that we can actually beat Big Oil,” the governor said. Press conference before signing the bill. “There’s a new sheriff in town in California who has brought Big Oil to his knees.”

in about 3 months, SBX1-2 tag Allows the state Energy Resource Conservation and Development Board to establish a maximum total gasoline refining margin and sets penalties for California-based refiners that exceed that margin.

The bill, which is backed by state Senator Nancy Skinner, a Democrat, was passed by the state legislature on Monday after gaining state Senate approval last week in an “extraordinary session” to expedite the bill.

While the bill would allow the European Commission to impose fines, it would also require authorities to consider refiner exemption requests. The law also mandates that all fines collected be funneled into the State Treasury’s “Price Inflation Penalty Fund.”

“We are saying no to price gouging, market manipulation, consumer protection, accountability and surveillance,” California Attorney General Rob Bonta said at a news conference.

“We’re looking, we’re watching, we’re standing up for everyday Californians,” added Bonta.

With the goal of maximizing transparency, the law also creates an independent oil market oversight unit within the Commission. According to the bill, that department will help guide the governor on issues related to fuel pricing and decarbonization.

“We are finally able to get into that black box,” Newsom said. I have.”

California law already requires refineries to submit activity reports to the commission within 30 days of the end of each calendar month, or civil penalties apply.

SBX1-2 passed both houses of the state legislature, beginning a rapid process of denouncing the bill’s opponents in a “special session” requested by Newsom.

The California Constitution Allows the Governor to Request Such Special Sessions through the declarationBills Approved and Signed After Extraordinary Session Valid after 90 daysunlike the January 1 start date that applies to bills passed in regular sessions.

Industry stakeholders and politicians opposing SBX1-2 have criticized the bill for being rushed and pointing out that certain Californians are left out of the conversation.

At a state Senate committee meeting last week, Zachary Leary, senior director of California policy for the Western State Petroleum Institute, described the legislation as “an unprecedented and untested experiment in California’s fuel market.” .

Moving forward, Newsom acknowledged that “there is still work to be done,” and that he needed to set up an oversight department, hire new employees, and refrain from over-promising.

“We remain vigilant — we are mindful of what we are heading towards and we are mindful of our responsibilities,” the governor said.

“We want to control the future and we want to do it fairly,” he added.

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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