Governor Newsom signs bill creating petroleum oversight division
SACRAMENTO, Calif. – On Tuesday, Governor Gavin Newsom signed legislation to create additional oversight authority within the state government in response to high gas prices in the state.
The bill, SBx 1-2, creates an independent division within the California Energy Commission staffed by market experts, economists, and investigators charged with identifying market design flaws and market power abuses.
“I am proud of my colleagues for passing this first-in-the-nation protection against price gouging by Big Oil. Californians faced outrageously high gas prices last year, prices that strained family budgets an extra $600 or more a month," said State Senator Nancy Skinner, the author of SBx 1-2. "This landmark law will allow us to hold oil companies accountable if they pad their profits at the expense of hard-working families.”
The new Division of Petroleum Market Oversight is authorized to set a maximum gross gasoline refining margin, impose civil penalties for violating that margin and has its own investigatory subpoena power.
Governor Newsom said, “With this legislation, we’re ending the oil industry’s days of operating in the shadows. California took on Big Oil and won. We’re not only protecting families, we’re also loosening the vice grip Big Oil has had on our politics for the last 100 years.”
Existing law already requires major oil producers and refineries to annually submit some information to the California Energy Commission, but this new legislation requires operators of refineries to report additional information including the net gasoline refining margin per barrel of gasoline sold in a given month and for that information to be made available on the Commission's website.
In cooperation with the California Department of Tax and Fee Administration, the Division is required to submit a report to the state's Legislature on or before Mar. 1 of each year.
State Senate President pro Tempore, Toni G. Atkins said, “This bill provides important tools to help Californians get the answers we deserve about oil company profits and price gouging. Through the leadership of Senators Skinner, Bradford, Limón, and McGuire, and our colleagues in the Assembly and the Administration, these new reforms are strong on transparency and accountability."
The new law will take effect on Jun. 26 of this year.