Newsom Pointing Finger in the Wrong Direction for Gas Prices

Published May 18, 2020

California lawmakers are at it again in with more lawsuits in May 2020 against two multinational gasoline firms for allegedly manipulating California’s gas prices and costing consumers more at the pump.   

Governor Newsom and Attorney General Becerra have short memories as “their own Democratic” lawmakers already killed transparency of pricing at the pump.  The Governor and AG have already forgotten that a 2018 bill, SB 1074, sponsored by State Senator John Moorlach (R) from Costa Mesa and championed by the minority party in the State was effectively bottom drawered by their own ruling party. 

A few years ago, at an April 23, 2018 hearing before the State Senate Committee on Business, Professions and Economic Development. I testified in support of Senate Bill 1074 (John Moorlach) called “Disclosure of government-imposed costs,” which would have required gas stations to post near each gas and diesel pump a list of cost factors, to include federal, state and local taxes, as well as costs associated with the state’s environmental rules and regulations.  

The Democrat controlled committee was adamant they did not want the public to see all the costs included in the posted pump price, and killed the Bill  that would make gas pricing transparent, from future consideration and would have eliminated the need for an investigation in the first place. Today, we are hearing the same concerns that Senate Bill 1074 (Moorlach) would have remedied.  And the dance continues.

With the summer blend of fuel costs hitting the pumps, lawmakers are once again keeping residents blissfully ignorant of the many taxes and regulatory costs that drive up prices, while they are getting press about challenging why Californians continue to pay almost $1.00 more per gallon of fuel than the rest of the country. Some of the costs hidden in the all-in posted price of fuel at the pump are:

  • Federal tax per gallon
  • Excise tax per gallon
  • State tax per gallon
  • Local sales tax per gallon
  • Cap and trade program compliance costs per gallon
  • Low-carbon fuel standard program compliance costs per gallon
  • Renewable fuels standard program compliance costs per gallon
  • Refinery winter and summer reformatting costs per gallon

That is a lot of taxes and costs. The difference between those “fixed” governmental costs from taxes and environmental regulations would obviously explain the total costs the manufacturers of those fuels charge the vendors, who add their markup, and the actual price the consumer experiences at the pump. 

As the Cap & Trade and Low Carbon Fuel Standard Programs kick into higher gear in the coming years, more costs onto fuels are projected by 2030 which may add another dollar or two to the per gallon fuel cost consumers will pay at the pump.

They are now fueling the idea, pun intended, that the oil companies are filling their pockets with the extra money California consumers experience at the pump.  The local media are unknowing co-conspirators in this ruse.

California boasts that it is a leader in all sorts of things. Well, California is the only state in contiguous America that imports most of its crude oil energy from foreign countries.  

Misguided Sacramento leaders have caused California  to increase imports from foreign countries from 5 percent to 57 percent of total consumption. The imported crude oil costs California more than $60 million dollars a day, yes, every day,  being paid to oil-rich foreign countries, depriving Californians of jobs and business opportunities. 

The Governor perpetuates the continuous cost increases with his mission to markedly reduce in-State oil production even more and is seeking to permanently ban oil-shale fracking technology’s use which would INCREASE costly foreign crude oil imports to California to fill the gap of ever-declining California and Alaska production, further crippling the State, forcing the continuation of California  as a remarkable national security risk for the USA.

As America recovers from the COVID-19 shelter-in-place mandates, California cannot rid itself from the continuing and state-prescribed high costs of energy that other states are not shackled with. California  officials are doing nothing to expose those self-inflicted costs intentionally “dumped” onto the posted price at the fuel pumps to effectively and forever resolve the causes of the high energy costs that will severely limit the state’s potential for recovery.

The transparency bill SB 1074 from 2018 would have given motorists information on what is really going on. But for the Democratic supermajority in the Legislature, bliss is keeping Californians ignorant. As expected, the current vocal concerns of lawmakers will get discussed again and again, but action toward transparency to the public will be avoided.

[Originally posted at Fox & Hounds]