California enacted a bill banning price gouging at the gas pump quickly, which means that businesses that violate the rule will be subject to civil penalties. The new bill also grants the California Energy Commission (CEC) the ability to issue penalties as necessary and creates an independent watchdog division inside the CEC.
The administration of California Governor Gavin Newsom reports that in 2022, oil firms will raise state gas prices to $6.42 per gallon. This was $2.61 per gallon more expensive than the national average. Oil and gas firms announced record earnings in the trillions of dollars that same year.
According to California Attorney General Rob Bonta, those who can least afford it are most affected by record-high retail gas prices and record-breaking profits for Big Oil. Californians have been kept in the dark about the activities of the gas industry for far too long. Meanwhile, many Californians are trying to make ends meet while oil giants have been padding their coffers.
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Even though California normally has higher petrol costs than the rest of the country due to state laws and higher gas taxes to support cleaner air, in 2022 there were far larger price differences between state and national gas price averages.
California last week proposed SBX1-2, a bill to penalize oil firms for price gouging, in response. The state senate swiftly approved the plan, and this week Governor Newsom signed it into law.
Now, the newly constituted section of the CEC, which will consist of investigators, market specialists, and economists, will be responsible for the openness and monitoring of oil corporations.
According to the governor’s office, the division will evaluate the petroleum market and has the authority to look into business sales and pricing practices. Also, oil companies are required to provide the division with pricing data. The division may send businesses to the Attorney General if it discovers price gouging. Individuals who break the law will have to pay fines.
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Californians faced outrageously high gas prices last year, prices that strained family budget an extra $600 or more a month, Senator Nancy Skinner (D-Berkeley), the author of the bill, said. With SBX 1-2, California has made it obvious to the oil business that if it engages in price gouging, Big Oil will bear the burden rather than the general public.
Certain instances of price gouging are already prohibited in California by Penal Code Section 396, which prevents price hikes over 10% for many goods and services in times of emergency. The new law banning inflated fuel prices will take effect on June 26.