ABX2-1 protects consumers from avoidable gas price spikes that pad big oil profits
October 15, 2024 – OAKLAND, CA – California Attorney General Rob Bonta issued a statement on Monday after ABX2-1 was signed into law by Governor Gavin Newsom. Authored by Assemblymember Gregg Hart (D-Santa Barbara), Assemblymember Cecilia Aguiar-Curry (D-Winters), Senator Nancy Skinner (D-Berkeley) and co-sponsored by Attorney General Bonta and Governor Gavin Newsom, ABX2-1 would stabilize California's oil market by ensuring refineries have adequate fuel reserves to avoid supply shortages that hike gas prices and harm consumers.
“Californians have been paying too much for gas, while year after year, oil companies report record profits at their expense. Let’s be clear – the price spikes consumers see at the pump are profit spikes for big oil,” said Attorney General Rob Bonta. “Enough is enough. ABX2-1 will save Californians billions of dollars and reduce opportunities for Big Oil to manipulate the market.”
“Price spikes have cost Californians billions of dollars over the years, and we’re not waiting around for the industry to do the right thing — we’re taking action to prevent these price spikes and save consumers money at the pump,” said Governor Gavin Newsom. “Now, the state has the tools to make sure they backfill supplies and plan ahead for maintenance so there aren’t shortages that drive up prices. I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians.”
“This landmark legislation is a win for consumers, and a win for accountability in the state’s gasoline market,” said Assemblymember Gregg Hart, D- Santa Barbara. “ABX2- 1 will save working California families billions at the gas pump. This commonsense solution has received broad public support because consumers know that when gas prices spike in California, the oil industry unfairly profits.”
“ABX2-1 was the subject of an extensive amount of scrutiny, testimony and participation by Members of the Legislature in over 18 hours of hearings. I am proud of the work done by our Assembly Policy Chair, Assemblymember Petrie-Norris, and my colleagues and Joint Authors Assemblymember Hart and Senator Skinner on this critical issue,” said Assembly Majority Leader Cecilia Aguiar Curry, D-Winters. “This bill clearly states that no regulations will move forward unless there is a tangible benefit to California gas consumers, and that the safety of our refinery workers and the public is paramount in any action taken by the State. Our work is not done when the Governor signs ABX2-1. We owe it to all Californians to remain actively engaged in the regulatory process to assure those goals and values are met.”
Californians are fed up with paying too much at the pump while year after year, oil companies rake in record profits.
— Rob Bonta (@AGRobBonta) October 15, 2024
We’re putting Big Oil’s market manipulation to an end. pic.twitter.com/RmNRujC9BB
California's oil market is uniquely vulnerable to manipulation from oil companies. California’s isolated fuel market makes it so supply disruptions including planned maintenance outages can dramatically impact prices. Because nearly all in-state supply comes from a handful of refineries, a single refinery outage could drastically reduce refining capacity. This volatility places an undue burden on California consumers, especially consumers with fixed or limited incomes.
To stabilize California's oil supply and prevent price spikes, ABX2-1 requires refineries to maintain adequate reserves and properly plan for refinery shutdowns. ABX2-1 would authorize the California Energy Commission to adopt regulations requiring refiners to maintain minimum inventory levels and establish effective penalties to ensure the law is enforceable and Big Oil follows the rules. The Commission can only adopt these regulations if it determines that they will lead to lower average retail prices, increase the fuel supply, and reduce price instability for consumers.
Attorney General Bonta is steadfast in his commitment to protect consumers at the pump and hold bad actors accountable. This month, Attorney General Bonta urged California residents who purchased gas in Southern California in 2015 to submit a claim for a payment under the state’s $50 million settlement with gas trading firms for tampering with and manipulating prices for California gasoline. Last year, Attorney General Bonta co-sponsored SBX1-2, which increases transparency in the oil industry to help identify causes of price irregularities. Authored by Senator Nancy Skinner (D-Berkeley), co-sponsored by Governor Newsom, and approved by a supermajority in both the Senate and Assembly, SBX1-2 created a dedicated independent watchdog to root out market manipulation and price gouging by oil companies. The law went into effect on June 26, 2023.
Source & photo: CA DOJ
