- California gas prices have been on a three-month decline as the California Gas Price Gouging and Transparency Law continues to shine a light on the oil industry. Separately, Attorney General Rob Bonta just reached a $50 million settlement with two gas trading firms for manipulating prices.
August 04, 2024
Sacramento, CA (Highpoint Digest) − Drivers are paying less at the pump compared to the same time last year and the year before, with gas prices in California down 78 cents per gallon since mid-April.
This decrease was driven by lower oil industry margins. which includes costs and profits for refining, distribution and marketing. In April, the oil industry’s share of the price of a gallon of gas was $1.66. As of July 15, it was $1.04, more in line with historical and current national trends. At the same time crude oil decreased slightly from $2.16 to $2.04 per gallon.
“Our new tools are providing a deeper insight into what is happening in the petroleum market so we can better understand and inform the public about what’s driving gasoline price changes across the state,” said California Energy Commission (CEC) Vice Chair Siva Gunda.
Officials at the CEC and the Division of Petroleum Market Oversight (DPMO) are able to better understand supply, demand, and price trends in the petroleum market because of data and transparency tools provided under Senate Bill X1-2, the California Gas Price Gouging and Transparency Law, which took effect a year ago.
“While these trends are positive, we remain vigilant,” said DPMO Director Tai Milder. “Refiners must continue to plan responsibly – resupplying the market and maintaining adequate inventories if and when they go offline.”
On July 10, 2024, Attorney General Rob Bonta announced a $50 million settlement with two gas trading firms as part of the state’s larger effort to hold the oil industry accountable for unfair practices that lead to troubling price increases.
The CEC is closely tracking gas prices as part of SB X1-2 implementation, looking at the influence of several factors, including gasoline supply and refinery maintenance. The CEC’s Energy Assessments Division is taking the lead in implementing the data collection, reporting, and assessment activities under the law.
DPMO is an independent division within the CEC that was created as part of SB X1-2. It is responsible for carrying out the activities in the law focused on market oversight and investigation.
At a June 6 workshop, CEC and DPMO officials were told that CEC analysis indicates that there should be adequate supply for California gasoline if the refining sector plans ahead for the summer driving season. However, officials warned that if refineries go offline without plans for adequate resupply, inventories could drop and lead to price spikes.
The workshop was part of the ongoing activities to implement the law, which enhances the state’s ability to understand and respond to gasoline price spikes and excessive prices faced by California consumers. Following price spikes at the pump in the Fall of 2022, Governor Gavin Newsom signed SB X1-2. The law was signed in March 2023 and took effect June 2023.
Source: California Energy Commission
Image Credit: California Energy Commission
