Gov. Newsom Signs Bill Mandating Fuel Supply Requirements


   
    

    

   OAKHURST, N.J. (DTN) --- California Governor Gavin Newsom on Monday signed 
into law ABX2-1 requiring oil refiners in the state to maintain a minimum 
inventory of fuel to avoid supply shortages and also requiring refiners to plan 
for resupply during refiner maintenance.

   "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 Gov. 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 so grateful to our partners in the Senate and Assembly for acting 
quickly to push this forward and help deliver relief to Californians."

   Following gasoline price spikes in 2022, Gov. Newsom called for a special 
session to address pump price hikes and worked in partnership with the 
Legislature to sign into law a package of reforms. Gov. Newsom's signing of 
ABX2-1 came hours after the state Assembly in a vote 41-16 vote approved state 
Senate amendments to the bill. The measure takes effect in 90 days.

   Also on Monday, Gov. Newsom announced his six appointments to the 
Independent Consumer Fuels Advisory Committee.

   Attorney General Rob Bonta said, "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. Enough is enough. ABX2-1 will save Californians 
billions of dollars and reduce opportunities for Big Oil to manipulate the 
market."

   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.

   Last year, AG 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.  

   Prior to the final Assembly vote on ABX2-1 on Monday afternoon, Western 
States Petroleum President and CEO Catherine Reheis-Boyd said in a statement, 
"Our government leaders spent significant time and money in a special 
legislative session and came up empty-handed. Even worse, they knew a 
47-cent-per-gallon gas tax increase is coming in 2025, and this session served 
as a smokescreen to hide it from Californians. Legislators still fail to 
understand our industry or what drives high gas prices. Regulators remain 
fixated on controlling businesses with more taxes, fees, and costly demands. 
Most alarming, our leaders ignored the men and women in the oil and gas 
industry who stepped forward to offer real expertise and express grave 
concerns."

   "California's energy infrastructure remains under threat from government 
neglect and is on the brink of failure, which will send prices even higher. And 
all of this could have been avoided. For Californians hoping for lower energy 
prices, stable food costs, and answers about the approximate $1.30 per gallon 
in taxes and fees they already pay at the pump--they'll have to wait for new 
leadership. We will continue to educate lawmakers and the public on the true 
factors driving California's high costs of doing business. For those ready to 
stop playing politics, we welcome the opportunity to address the real issues 
driving fuel prices higher for Californians and their families."




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