California’s latest law cracking down on fuel refiners in the state is likely to push already high prices at the pump even higher, according to multiple energy experts.

Democratic California Gov. Gavin Newsom signed into law ABX2-1 on October 14, forcing state officials to impose certain restrictions on refiners to prevent alleged price gouging by energy companies and add them to a list of anti-fossil fuel industries. authorized to maintain inventory levels. State policies and regulations. In addition to rules already in place, the new policy will further squeeze refiners and fuel producers with the help of other costly rules regulating the fossil fuel industry, according to multiple energy sector experts. , which would hurt supply and push prices even higher.

California already has gas prices of about $4.64 per gallon, the highest of any state in the United States. According to Convert to AAA gas price data. A week after the bill passed, Phillips 66 announced plans to close one of its Los Angeles-area refineries in 2025. This means one of California’s nine refineries and 8% of the state’s available refining capacity will close. According to In the Los Angeles Times. (Related: What Did California’s Fossil Fuel War Actually Accomplish?)

“Price gouging has cost Californians billions of dollars over the years. We are not waiting for industry to do the right thing. We are taking action to save people money,” Newsom said. said Once the bill is signed. “The state now has the tools to backfill supply and proactively plan maintenance to avoid shortages that drive up prices. We can move quickly to advance this and deliver relief to Californians.” Thank you to our partners in the Senate and House for doing so.”

But Patrick de Haan, a prominent gas market analyst who writes for GasBuddy, rejects Newsom’s claims that energy companies are exploiting Californians. Instead, he places much of the blame for the state’s high energy costs at the feet of overzealous regulators and politicians.

“You can’t underestimate it. It’s not the oil industry that’s ‘ruining you’ in California. It’s the crazy politicians who are introducing layers of expensive bills,” de Haan said in October. I wrote it in the paper on the 15th. post Dear X, I used to be on Twitter. “It’s Newsom’s government first and foremost.”

De Haan also wrote in a separate article that he expects other refineries to follow in Phillips 66’s footsteps and close California refineries following the passage of ABX 2-1. post. Approximately 90% of the gasoline consumed in the state is refined at facilities within the state. According to So if more refineries shut down as supply decreases, prices could rise, all else being equal. (Related: Energy and business groups ask Supreme Court to stop California from forcing EVs across America)

Democratic California Governor Gavin Newsom supports President Joe Biden at the Van Buren County Democratic Party’s “BBQ for Biden-Harris” event in South Haven, Michigan on July 4, 2024. (Photo by Bill Priano/Getty Images)

“They keep talking about how companies are going about price gouging. It’s actually the politicians. I wonder when people will wake up,” said Dan Kish, a senior fellow at the Energy Institute. told DCNF. “It’s clear what they’re doing, they want all electric cars, and to do that they’re jacking up gas prices in every possible way. They’re making gas rarer and more expensive, and this is what they say However, instead of listening to the people’s opinions, they hope to help “nudge” people to do what they want. ”

Mr. Newsom’s office counters that state policy is largely responsible for the state’s soaring gas prices.

“Gas prices are overwhelmingly comprised of oil costs and industry profits,” a Newsom spokesperson said in an email to the Daily Caller News Foundation. “Analysis shows that last week’s bill would save Californians more than billions of dollars each year,” the spokesperson continued, adding that Newsom at a press conference where DCNF announced the new refinery law. mentioned the statement.

“Gasoline prices are also significantly lower this year than in previous years after the governor signed new accountability and transparency tools,” the spokesperson added.

Andy Walz, Chevron’s president of downstream, midstream and chemicals, slammed ABX2-1. Letter of October 8th He explained to California lawmakers how the bill could increase costs for consumers in a misguided attempt to stop supposed price gouging. In his letter, Walz wrote that the new law is clearly more political than practical and will result in Californians paying more for gas in the long run.

“Due to California’s policy choices, Gasoline shortages due to alienation of suppliers,” Walz wrote. “Incentive policies are lacking For additional purification equipment and supplies. California, stop making things worse for consumers. ”

The new refinery law isn’t the only policy expected to raise gas prices in California in the near future.

The California Air Resources Board (CARB) will decide after Election Day whether to tighten the state’s Low Carbon Fuel Standard (LCFS), a program aimed at reducing the carbon intensity of transportation fuels in the state. We plan to do so. According to Go to Politico. CARB initially estimated that doing so could increase pump prices by 47 cents per gallon, but CARB later retracted that prediction.

but, Danny Cullenward, a climate economist at the Kleinman Center for Energy Policy at the University of Pennsylvania, recently published his book. analysis CARB’s upcoming LCFS decision could actually increase prices by 65 cents per gallon in the near future and 85 cents per gallon by 2030.

Additionally, California has a statewide cap-and-trade program that sets reduction limits for major sources of emissions across the state to encourage businesses to adopt low-emission green technologies. In an August interview with DCNF, Walz cited California’s cap-and-trade program as one of the most aggressive regulatory regimes in the state and said the company is moving its headquarters out of California to Texas. He said that he contributed to the August decision.

“There are two reasons California’s gas prices are high, and neither of them has anything to do with price gouging. The first reason, which we all know all too well, is additional taxes,” says the California Policy Center. Water and Energy Policy Director Edward Ring told DCNF. “When you factor in all state taxes, fees, and programs, that adds an additional $1.23 to the price of a gallon of gasoline, and that doesn’t include the 18 cents per gallon federal excise tax.”

“The other part, which is worth mentioning in all fairness, is that California has a different blend required for gasoline, which makes refining costs a little bit higher, but again, , it’s not that big of a factor,” Ring continued. “If California doesn’t want people to pay high gas prices, maybe it should figure out a way to run the state with less money. Either way, California is doing a terrible job. We could also lower taxes.”

CARB did not respond to requests for comment.

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