Newsom unveils details of plan to cap oil company profits

San Francisco Chronicle / 3-17-23

After months of closed-door negotiations, Gov. Gavin Newsom on Wednesday (March 15) announced long-awaited details of his proposal to fight California’s high gas prices by capping the profits of oil companies and fining those who exceed those limits.

The crux of the governor’s updated plan: Let state energy regulators make the rules.

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Under his updated proposal, the California Energy Commission would have rulemaking authority to create a cap on oil refiners’ profits — and to set the amount. They would also have the authority to fine companies that exceed the cap and set penalty amounts.

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Critics of Newsom’s plan, including the Western States Petroleum Association and Republican legislators, say it could have the unintended consequence of driving prices up if it causes oil companies to produce less gas in California.

LINK (paywall): https://www.sfchronicle.com/politics/article/newsom-oil-profit-tax-17841770.php

FROM THE LINK: California’s average statewide price for a gallon of gas was $4.90 on Wednesday, about $1.43 more than the national average, according to AAA.

Details need to be worked out. And the plan must pass the state Assembly and Senate to become law.