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Gov. Gavin Newsom looks to penalize oil companies over gas prices

His office says it is a way to “hold big oil accountable” by monitoring California’s petroleum market on a daily basis.
Posted: 9:36 PM, Mar 21, 2023
Updated: 2023-03-22 00:36:37-04
Gas Prices, Bakersfield (FILE)

SACRAMENTO, Calif. (KERO) — Governor Gavin Newsom has created a special session proposal to penalize oil companies he says over-charged California customers for gas.

According to Governor Newsom’s office, this proposal would include the implementation of a watchdog system within the California Energy Commission. His office says it is a way to “hold big oil accountable” by monitoring California’s petroleum market on a daily basis.

If approved, the measure would allow the energy commission to impose a price gouging penalty, a fee on refiners that charge more than a maximum allowable margin for the price of gasoline.

However, it’s an approach Kevin Slagle, vice president of strategic communications at Western States Petroleum Association says isn’t solving the issue of high gas prices.

“We’re not going to tax and create bigger bureaucracies and expect that we are going to have lower costs in the state and that is the approach that Governor Newsom is taking. He wants to create a new bureaucracy of 20 to 30 appointees that would have the power to investigate, to raise costs, and impose taxes. When you do that to a commodity, when we get to the pump what we are likely to see are higher costs.”

Oil Wells in Bakersfield (KERO)

Slagle says the solution to high gas prices is additional supply and until the state addresses that prices will continue to fluctuate.

“Rather than continuing to discourage investments, to discourage our industry, we should be encouraging it. As we transition to other forms of energy, we’re going to need the fuels that we provide today.”

Assemblyman Vince Fong says during the legislative process of this proposal there is going to be what he calls a “vigorous debate.”

“The idea that he can demonize the hard-working men and women of our community that produce reliable energy and power our state every single day and somehow create some type of bureaucracy that will allow faceless bureaucrats to increase energy taxes, that is not the long-term solution.”

Oil Wells in Bakersfield (KERO)

In response to the spike in prices ultimately Fong says it boils down to investments and production.

“If we’re serious about reducing the price of gasoline, if we’re serious about creating affordable and reliable energy supplies, this is the wrong approach. We need to be investing in pipeline infrastructure that gets oil and natural gas from point A to point B. We actually have to produce more gasoline.”

Governor Newsom’s office says the spike in gasoline prices resulted in record refiner profits of $63 billion in just 90 days, affecting low- and middle-income families, driving inflation higher, and making it harder for California families to make ends meet.


In terms of production, Kern County is the statewide leader. The county provides 70 percent of our state's oil and two percent of the nation's oil.

According to data from the Kern Economic Development Corporation, as of last year over 13,000 Kern residents were employed directly and indirectly by the oil and gas industry.

Additionally, Kern County also supplies more than half of the state's renewable energy and has the largest wind farm in the country.