Democratic California Gov. Gavin Newsom made a sudden reversal this week on his effort to hit oil companies with price gouging penalties amid record-high gas prices and an energy crisis.
Newsom on Thursday unveiled a proposal creating a new watchdog arm within the California Energy Commission (CEC) that would monitor daily petroleum market price fluctuations to ensure that market participants “play by the rules.” The proposed CEC office would be granted broad authorities to analyze refinery data, subpoena for other information and directly refer cases to the state’s attorney general.
“We’re making major progress with the Legislature to hold Big Oil accountable for fleecing Californians at the pump,” Newsom said in a statement. “With a coalition representing hundreds of organizations and local leaders backing our proposal to impose strong and effective oversight measures on oil companies, the momentum is on our side to get this done for California families.”
“What we’re asking for is simple: transparency and accountability to drive the oil industry out of the shadows,” he continued. “Now it’s time to choose whether to stand with California families or with Big Oil in our fight to make them play by the rules.”
However, while the governor branded the proposal as a “stronger” action, it represents a pared-back version of a separate proposal to punish oil companies. Ultimately, it could also indefinitely delay implementation of a state price-gouging penalty, which Newsom has aggressively pushed, according to The Sacramento Bee.
In December, Newsom announced aggressive actions to punish oil companies for “lying and gouging Californians to line their own pockets.” The comments came after he called on the state’s legislature to develop legislation cracking down on excessive energy price increases and called on the California Senate Committee on Energy, Utilities and Communications to hold a hearing on the topic.
The legislation that Newsom backed would hit companies with a financial penalty if they were found to increase gasoline prices “excessively.” However, the legislation hit significant roadblocks after experts and state lawmakers, including Democratic leaders, expressed concern that it would have unintended consequences impacting consumers.
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