08/15/2024 | Press release | Distributed by Public on 08/15/2024 13:05
Aug 15, 2024
What you need to know: Price spikes on consumers are profit spikes for oil companies, and they're overwhelmingly caused by refiners not backfilling supplies when they go down for maintenance. This first-in-the-nation proposal would require refiners to maintain minimum supply inventories, which would help prevent price spikes and save Californians hundreds of millions of dollars every year.
SACRAMENTO - The state has found that, when refiners limit gasoline supplies, prices spike at the pump and create massive profits for Big Oil. Today, Governor Gavin Newsom announced a new, first-in-the-nation proposal to further prevent price spikes and save Californians money.
The proposal would authorize the California Energy Commission (CEC) to require that petroleum refiners maintain a minimum fuel reserve to avoid supply shortages that create higher prices for consumers. If this proposal had been in effect in 2023, Californians would've saved upwards of $650 million in gas costs due to refiners' price spikes.
The CEC also found that, in 2023, there were 63 days of California refiners maintaining less than 15 days of gas supply - driving up prices. This proposal would help ensure that the industry behaves responsibly and plans ahead to protect consumers from price spikes.
Governor Gavin Newsom
The state's new oil & gas accountability tools have helped mitigate price spikes and held Big Oil accountable, with prices significantly lower than at this time last year and the year before. This summer, Californians spent an estimated $728 million less on gasoline than the same period last year. Today's announced proposal would further protect consumers at the pump and help stabilize the market for the long-term.
"The data is clear: oil refiners have been racking up profits by planning maintenance that reduces supply during our busy driving seasons. The Governor's proposal gives us new tools to require refiners to plan responsibly and prevent price gouging during maintenance." - Tai Milder, Director of the Division of Petroleum Market Oversight for the CEC
What the proposal would do
How we got here
Other countries have taken similar actions
The European Union adopted an Oil Stock Directive that requires EU countries to maintain emergency stocks of crude oil and petroleum products equal to at least 90 days of net imports or 61 days of consumption, whichever is higher.
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