California Governor Demands Investigation Into High Gas Prices

Matt Posky
by Matt Posky
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california governor demands investigation into high gas prices

On Tuesday, California Governor Gavin Newsom responded to a new report claiming oil companies have been overcharging customers over social media.

“[California] drivers have paid an average of 30 cents more per gallon. There’s no identifiable evidence to justify that,” Newsom said. “I’m demanding an investigation. If oil companies are engaging in false advertising or price fixing — legal action should be taken.”

With California leading the charge against the federal government’s proposed fuel economy rollback, Newsom’s words are a bit of a faux pas. While we agree that companies should not be engaging in price fixing, California’s high fuel prices are largely its own doing. Newsom’s claims completely ignore this rather obvious fact — calling his ability to effectively negotiate the national fueling fracas into question.

We weren’t the only ones to notice, either. Twitter users immediately responded to the governor, with many acknowledging that Californians actually pay the highest gas taxes in the whole country (the state surpassed Pennsylvania this summer). Equally bizarre is Newsom’s outspoken support of the state’s 2017 gas tax increase and condemnation of 2018 ballot measure aimed at repealing it. He has to know that’s why fuel prices are so much higher there… right?

The California Energy Commission (CEC) report Newsom referenced was something he commissioned earlier in the year. The goal was to determine why Golden State residents were paying so much more for gas than people in other parts of the country. However, the CEC report determined “the primary cause of the residual price increase is simply that California’s retail gasoline outlets are charging higher prices than those in other states.”

It also outlined how much more Californians are being charged via regulatory measures and fuel taxes. The report estimated that California’s gas prices were $0.75 higher than anywhere else in the country last year, and over half of that appears to be directly attributable to the state’s taxes, low-carbon fuel requirements, and greenhouse cap-and-trade program. The West Coast, which is also subject to higher crude prices than other parts of the country, ran into supply problems this year as local refineries swapped over to special blends not used in other states.

While that doesn’t automatically exonerate Big Oil from the suspected price fixing, it also doesn’t support any accusations against them. Ultimately, this forced Newsom to kick the can down the road to Attorney General Xavier Becerra. The California Energy Commission did the same:

The CEC does not have any evidence that gasoline retailers fixed prices or engaged in false advertising. Moreover, the CEC lacks the expertise to determine whether such behavior occurred. The California Department of Justice is well equipped to conduct an appropriate investigation.

The whole thing is a little confusing. Newsom appears concerned with the high prices Californians have to pay at the pump but completely overlooks the core reasons for the problem. This offers plenty of ammunition to his political opponents in the gas war, especially with the Environmental Protection Agency repeatedly accusing the state of being mismanaged — and creating new ecological issues while failing to effectively address existing ones. At least, that’s how EPA Administrator Andrew Wheeler tells it.

At this point, we don’t expect either side to play fair and take anything at face value. Still, this will be a black eye for California, and it could have been avoided entirely if state leadership bothered to address why we need fuel taxes, or if it promised to tamp them down in the future. Instead, the governor responded to public complaints of high fuel prices by pointing the finger at Big Oil with no proof.

[Image: Michael Vi/Shutterstock]

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

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  • IBx1 IBx1 on Oct 25, 2019

    hahahahhahaha Oh wait, he's serious, let me laugh even harder HAHAHAHAHAHHAHAHAHAHHAHAHA

  • -Nate -Nate on Oct 26, 2019

    "asking why they charged so much more. All the owners had the same response, “Because we can”. " "Gas price collusion has been investigated on and off for 45 years, with no evidence of it." " Raising the price only drives customers away." .....Followed by the usual alt right whiners who envy California and so take any opportunity to lambast it and take childish dishonest pot shots instead of being grateful that Californians all pay more Federal taxes to prop up the bankrupt red states.... In reality, the gasoline prices are only excessive because the gop deregulated the pricing, that's it . True in the 1970's when they did it, claiming it would make all fuels cheaper, almost free ! (like electricity and insurance, remember ? of course you don't, the truth scares you witless) . If you're envious of the substantially better life we have in California, stop whining and LEAVE then S.T.F.U. and enjoy your miserable bankrupt red states poverty life . -Nate

  • Ernesto Perez There's a line in the movie Armageddon where Bruce Willis says " is this the best idea NASA came up with?". Don't quote me. I'm asking is this the best idea NY came up with? What's next? Charging pedestrians to walk in certain parts of the city? Every year the price for everything gets more expensive and most of the services we pay for gets worse. Obviously more money is not the solution. What we need are better ideas, strategies and inventions. You want to charge drivers in the city - then put tolls on the free bridges like the Brooklyn, Manhattan and Williamsburg bridges. There's always a better way or product. It's just the idiots on top think they know best.
  • Carsofchaos The bike lanes aren't even close to carrying "more than the car lanes replaced". You clearly don't drive in Midtown Manhattan on a daily like I do.
  • Carsofchaos The problem with congestion, dear friends, is not the cars per se. I drive into the city daily and the problem is this:Your average street in the area used to be 4 lanes. Now it is a bus lane, a bike lane (now you're down to two lanes), then you have delivery trucks double parking, along with the Uber and Lyft drivers also double parking. So your 4 lane avenue is now a 1.5 lane avenue. Do you now see the problem? Congestion pricing will fix none of these things....what it WILL do is fund persion plans.
  • FreedMike Many F150s I encounter are autonomously driven...and by that I mean they're driving themselves because the dips**ts at the wheel are paying attention to everything else but the road.
  • Tassos A "small car", TIM????????????This is the GLE. Have you even ever SEEN the huge thing at a dealer's??? NOT even the GLC,and Merc has TWO classes even SMALLER than the C (The A and the B, you guessed it? You must be a GENIUS!).THe E is a "MIDSIZED" crossover, NOT A SMALL ONE BY ANY STRETCH OF THE IMAGINATION, oh CLUELESS one.I AM SICK AND TIRED OF THE NONSENSE you post here every god damned day.And I BET you will never even CORRECT your NONSENSE, much less APOLOGIZE for your cluelessness and unprofessionalism.