Governor Gavin Newsom signed a bill on Oct. 14 that allows for regulating oil refiners to maintain minimum reserves, aiming to curb high gas prices. Critics fear this could lead to further increases in gas prices. The effects of this new law may be visible as early as next summer, according to Newsom. The bill, known as Assembly Bill X2-1, enables the California Energy Commission to mandate refiners to store more fuel and regulate refinery maintenance schedules. Refiners failing to comply could face fines ranging from $100,000 to $1 million per day. The law empowers the commission to set minimum reserve levels and maintenance time frames from Jan. 13, 2025, until Jan. 1, 2033. Despite concerns that this could lead to a permanent increase in gas prices, Newsom believes it is a necessary step to prevent price spikes and save consumers money at the pump. California, please reconsider the impact on consumers.”
In September, the governors of Nevada and Arizona penned a joint letter to Governor Newsom expressing worries about proposed oil regulation legislation. They highlighted concerns about potential negative effects on drivers in the Western region if the legislation is passed.
The governors emphasized the reliance of their states on California pipelines for fuel, pointing out that looming cost increases and supply shortages could greatly impact Arizona and Nevada. Refiners have also expressed concerns about potential supply shortages and refinery shutdowns due to refinery inventory mandates, which could have serious consequences for the economies and transportation infrastructure of the Western region.
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