CA Anti-Gouging Law Has Led To Lower Gasoline Prices, Consumer Watchdog Finds

News provided by

Jun 28, 2023, 13:49 ET

LOS ANGELES, June 28, 2023 /PRNewswire/ -- California gasoline prices have dropped significantly and stabilized relative to national gas prices in the wake of the Governor's call, and enactment of, California's anti-gouging law, according to an analysis by Consumer Watchdog.

How Much More California Gas Cost Than U.S. Gas

Gap Between U.S. vs. CA Gas Prices: 2022 - $1.36, 2023 - $1.08

"The gubernatorial and legislative scrutiny of oil refiners has caused California gasoline prices to stabilize relative to US gasoline prices," said Jamie Court, president of Consumer Watchdog. "California drivers have saved more than $2 billion at the pump this year already thanks to the deterrence to gouging provided by the Governor and legislature."

As Californians get ready to take to the roads for the July 4^th holiday, data from the federal Energy Information Agency analyzed by Consumer Watchdog shows:

The average gap between California gas prices and US gas prices was $1.36 per gallon in 2022. During 2023, after debate began on a windfall profit penalty, the average gap fell to $1.08 per gallon over the first six months of 2023, a 28 cents per gallon savings.

The 28 cents per gallon savings adds up to more than $2 billion in savings for the first six months of 2023. (More than 14 billion gallons of gasoline are sold annually in California.)

In October 2022, when Newsom first called for a penalty, the US-California gas pricing gap stood at $2.43 cents. By January 2023, after the introduction of legislation empowering regulators to impose a price-gouging penalty, that gap fell to a low of 86 cents.

California gas prices averaged $5.32 cents in 2022 but that average has fallen over the last six months through the end of June to $4.56 per gallon.

Governor Newsom's signature at the end of March on SB-2 gives the California Energy Commission broad powers to investigate refiners, compels refiners to regularly report all aspects of their operations, and allows the commission to impose a penalty for price gouging. The law, which took effect June 26^th, prevents price manipulation by giving the state oversight over refinery outages, transparency in the commodities market, and detailed information about the production, export and import of fuel.

"Last October, California refiners got the message that outrageous price gouging at the pump wasn't going to continue to fly," said Consumer Advocate Liza Tucker. "It wasn't economic circumstances that caused the drop. It was a correction in oil refiners' attitudes."

The gap between California and US gas prices moderated throughout the legislative process—from Newsom's October 2022 call for a special legislative session to impose a windfall profits penalty, to California Energy Commission hearings at the end of November, to Senate hearings on legislation in February 2023, and Newsom's signature on SB-2 in late March.

California prices for regular gas per gallon reached $6.43 cents in June 2022. Today, the price for regular gas in California is $4.84 cents, according to AAA, and California gas prices are no longer the highest in the nation. Washington State holds that title with regular gas costing $4.98 per gallon versus California's $4.83 per gallon today, according to AAA.

"California still has a long way to go to further rein in gasoline prices," said Court. "Based on California's added taxes and environmental laws, the gap with US gasoline prices should be about 70 cents not $1.08. With the tools of the new oil refiner accountability law, the state can work to lower gas prices even more."

SOURCE Consumer Watchdog