California hopes to require

Fuel stockpiling will help stabilize prices as refineries shut for planned maintenance

California is known for having the highest gas prices in the country. According to AAA, the average price for regular unleaded gas in California is $4.598 per gallon, which is $1.187 higher than the national average. The only state with higher gas prices is Hawaii, where the average price for regular unleaded gas is $4.656 per gallon.

Gov. Gavin Newsom has introduced a new proposal to “prevent price spikes and save Californians money.” Under the plan, the California Energy Commission (CEC) would be authorized to require petroleum refineries to “maintain minimum fuel reserves to avoid supply shortages that lead to higher prices for consumers.”

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The proposal came after the commission found that refineries were maintaining less than 15 days of supply out of 63 days until 2023. This reportedly pushed up prices and generated millions of dollars in revenue for oil companies.

Tai Milder, director of petroleum market oversight at the Petroleum Council of Canada, was even more direct, claiming that “Refiners make significant profits by planning maintenance to reduce supply during our busy driving season.” He went on to say that the proposal would “require refiners to plan responsibly and prevent price gouging during maintenance.”

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The exact details are sketchy, but the proposal calls for penalties for refineries that fail to maintain adequate fuel inventories. However, it is unclear whether these penalties will be severe enough to have an impact. That said, the governor’s office claimed that Californians would have saved up to $650 million (£500 million/€586 million) in gasoline costs if the proposal had gone into effect last year.

“Soaring prices at the gas pump mean soaring profits for Big Oil,” Newsom said in a statement. “Refiners should be planning ahead and replenishing supply to keep prices stable, not playing games to make more profits. By having refineries act responsibly and keep gasoline stocked, Californians can save money at the pump every year.”

Refiners were not happy about this, with Reuters quoting the CEO of the Western States Petroleum Association as saying that the plan was “nothing more than a political attack on consumers and our industry.”

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