Wednesday, the governor announced he was changing course and instead will ask lawmakers to empower the California Energy Commission to decide whether such a penalty is necessary and, if it is, how much it would be. The bill was so important to Newsom that he took the rare step of calling lawmakers into a special session to pass it, a maneuver that allows them to focus on just one issue instead of being distracted by hundreds of other bills in a regular session.īut the proposal never got traction in the Democratic-controlled Legislature, where the oil industry is one of the top contributors to lawmakers’ campaign accounts. Newsom, a Democrat, responded by asking state lawmakers to pass a law that would impose hefty fines on oil companies if their profits surpassed a certain threshold - with all of the money generated from the fines going back to drivers.

Meanwhile, oil companies recorded supersized profits. Gas prices in California are always more expensive than the rest of the country because the state has higher taxes and fees than other states and requires a special blend of gasoline that is better for the environment but more expensive to make.īut last summer, the average price for a gallon of gas in California was more than $2.60 higher than the national average - a difference state regulators said could not be explained simply by taxes and fees. Gavin Newsom said Wednesday he wants state regulators to decide whether to impose the nation’s first penalty on oil companies for price gouging, pivoting after months of negotiations with legislative leaders failed to reach an agreement on a bill aimed at reining in the state’s notoriously high gas prices.

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