Filling up your tank is more and more expensive every day, but that does not mean that trying to improve the situation is a waste of time and resources. In some places like California, gas prices have been wild for years, especially due to practices by oil companies like price gauging.
But while this is hard to prove, lawmakers in California decided to just put a stop to it by passing a bill which gave the California Energy Commission (CEC) the authority to monitor oil companies and ensure that they were using air business practices that would not harm consumers in times of already high expenses, especially when they were already making a profit.
The law mandated the oil companies to produce and send in a report detailing profit margins and sales so that these could be made public withing 45 days. This would, in theory, ensure that they were compliant with the new law and that there would be more transparency both for agencies and consumers, but it did not work exactly that way.
The bill, sponsored by Governor Gavin Newsom and Senator Nancy Skinner was quite clear in what it wished to accomplish, call out the oil industry, cap profits if necessary, and bring prices down for regular drivers. But the reports that the companies sent in were often incomplete, inconsistent, unusable, not accurate or reliable, and completely implausible in most cases, which made accomplishing the aim of the bill nearly impossible.
In fact, according to the not so detailed reports that have been sent by refineries, some of them have not made any profit for months, losing money on every gallon sold between late 2023 and early 2024, which is why they should be fined or investigated any further. After all, the law would only apply to them if they raised prices while turning a profit, no one said anything about them losing money.
And the government has little recourse other than auditing the companies to get the real data, but by that point it is too late to change what customers have already spent, and any fines levied would not go back to those who paid, although the money could be used in public coffers to make life a little easier for citizens, it is not the spirit of why the law was implemented in the first place.
Did the new California law penalizing oil companies for surging gas prices work?
Considering the state of the reports, it is easy to say “no” and quite resoundingly, plus, under this new law, the state has not levied any fines or penalties against a single refinery. How could they? The reports have not allowed any real data to be discernible, and the Agency that would audit the oil companies is not the CEC, it would be the IRS, which has vastly different criteria for levying fines.
However, supporters of the bill are not being as fast to write it off. Officials have credited the law with helping to stabilize fuel prices, arguing that it curbs sharp increases and keeps overall costs lower for consumers. Requiring refiners to maintain contingency measures, they say, prevents abrupt supply disruptions that could otherwise drive prices higher.
Whether or not the bill is effective in saving the residents in the state any money is doubtful, but what is not in doubt is the fact that the CEC is not powerful enough to demand these reports and have them be submitted properly, and until they have the power to compel the information on a timely fashion, they will not be able to improve conditions for California residents that are already struggling to make ends meet.