California

Gavin Newsom, Supporter of Massive Gas Tax Hike, Demands Investigation of $4 per Gallon CA Gas Prices

The governor's request comes after the release of a report finding the state's taxes and regulations explain half of the higher prices Golden State motorists pay.

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California Gov. Gavin Newsom (D) is at it again, requesting on Monday that California Attorney General Xavier Becerra investigate possible price-fixing by California's major oil and gas companies.

The request comes after the release of a new report from the California Energy Commission (CEC) which found one partial reason for the Golden State's highest-in-the-nation gas prices—currently running at $4.13 per gallon according to AAA—to be the higher prices charged by brand retailers like Shell, Chevron, and 76.

Newsom had requested this report back in April to figure out why Californian motorists were paying a "mystery surcharge"—a term that refers to the price difference between state and national gas prices that can't be readily explained by California's higher taxes, or unique energy regulations.

"There is no identifiable evidence to justify these premium prices," wrote Newsom in his letter to Becerra, according to the The Los Angeles Times. "The mystery surcharge adds up, especially for cost-conscious, working families. If oil companies are engaging in false advertising or price-fixing, then legal action should be taken to protect the public."

That Newsom would use the release of this report to criticize gas companies for their high prices is somewhat puzzling. After all, the CEC investigation makes clear just how much the state's high taxes and regulations are contributing to higher gas prices.

The commission's investigation found that per gallon gas prices were roughly $.75 higher in California last year than in the rest of the country. Of this difference, some $.40 was attributable to the state's higher taxes (which includes a $.47 per-gallon excise tax plus an addition 2.25 percent sales tax), cap-and-trade regulations (which caps statewide emissions and then auctions off emissions credits to companies), and its low-carbon fuel standard.

Newsom famously supported the state's 2017 gas tax increase, and argued against a 2018 ballot measure that would have repealed it.

Of the remaining price difference, some $.10 was the result of higher crude prices in California. Retailer and refiner margins accounted for another $.23 of the difference.

Because refinery margins had grown and receded in step with the rest of the country since 2004 (save for a spike following the 2015 Torrance Refinery outage), while retail margins grew much more quickly in California, the CEC pinpointed the latter as the cause of the state's mystery surcharge.

Contra Newsom's claim that there was no justification for these higher prices, the CEC listed a number of reasons why branded retailers might be commanding a premium at the pump:

There are a number of possible reasons why consumers continued to buy higher-priced gasoline including station location, the acceptance of credit cards, and brand loyalty. There may also be perceived differences in gasoline quality based on retailers' claims regarding gasoline specifications or additive packages. These are all legitimate reasons why consumers are continuing to purchase these higher-priced brands.

The commission's report does note that false advertising on the part of gas retailers or even illegal price fixing might explain higher prices. The CEC nevertheless said that it found no evidence of these claims, and that the state's Department of Justice is better suited to investigate any wrongdoing.

Whatever retailers' reasons for charging higher-than-average gas prices, Newsom's request for a price-fixing investigation seems like a clear attempt to deflect blame from the state's own price-increasing policies.

As I argued in April, California politicians clearly feel like they've had good reasons to raise gas taxes to the second-highest in the nation, and to impose onerous environmental regulations.

The politicians who voted for or supported the state's 2017 gas tax increase—which includes not only Newsom but 17 of the 19 state legislators who requested a similar gas price investigation in January—or its environmental regulations obviously felt that the benefits of these policies outweighed the costs they imposed on consumers.

Rather than explain why those costs are worth it, these same politicians are now demanding criminal probes into retailers for daring to raise their own prices.

And while it's possible some form of price fixing is going on in California's retail gas market, it also seems unlikely.

Price-fixing usually requires markets dominated by a small number of firms, all of whom can be expected to stick to a secret, illegal agreement. The less sure each participant is that everyone else will stick to the price-fixing pact, the less incentive they have to abide by the agreement themselves.

That description doesn't seem to apply to California's retail gas market at all.

Shell and 76, two of the brands identified by the CEC as raising their prices the most, have captured only 10 and 8.8 percent of the market, respectively. ARCO, which controls 21 percent of the market, is among the lowest priced gas retailers in the state, according to the CEC report. Meanwhile, unbranded, discount-priced gas stations make up 19 percent of the California market.

Instead of chasing after improbable price-fixing conspiracies, perhaps Newsom should consider the ways in which his own administration might give working-class motorists a break by lowering taxes or cutting energy regulations.

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54 responses to “Gavin Newsom, Supporter of Massive Gas Tax Hike, Demands Investigation of $4 per Gallon CA Gas Prices

  1. First thing to get for the investigation is a mirror. The second step is to place Newsom in front of said mirror. Case solved.

    1. Then arrest the price fixers – the guv and any legislators who voted for the price fixing taxes.

      1. But he wanted the price fixed at $3.50, not $4.15. NOT FAIR.

        1. Personally, I’d love the oil companies to say, “Nope! For December, we’re not shipping any gas or diesel to Kalifornia. Just not going to do it. See how you like them apples.”

    2. How would that help a blind man?

      1. Except to say – Not all blind men are complete idiots.

    3. This is a distraction and the stupid California voter, obvious by who they vote for, is buying it.
      The gas-tax increase of 2017 was challenged, by initiative petition, in 2018, but went down to defeat because the politicians, like Newsom, said that it would mean the roads wouldn’t get repaired. But last week he announced that the increased gas-tax money was not going to road repairs, but to public transit, partially his “train to nowhere”.
      Thus, the need for a distraction.

  2. These are all legitimate reasons why consumers are continuing to purchase these higher-priced brands.

    There are lower priced alternatives available to Californians?

    1. Those would be the “unbranded, discount-priced gas stations” that “make up 19 percent of the California market.”

      Most people don’t trust no-name gas, though. They want their Techron.

    2. Undocumented gas stations.

      1. Does California protect undocumented fillups?

      2. Undocumented gas stations pump taco grease.

  3. I didn’t see any mention of higher minimum wages or increased business taxes, just the gas tax itself.

    1. Or higher real estate and construction costs.

  4. So, some companies charge more for the same product? Does this happen everywhere?

  5. Hey, if you want to be special and have special gasoline, you get to pay special prices.

  6. Well, damn.

    https://www.dontcomply.com/jury-rules-against-dad-state-sanctioned-child-abuse-moves-forward-in-texas/

    A 6 year old boy named James is under attack by his Pediatrician mother Anne Georgulas. She is attempting to change his gender against the wishes of the father and the little boy himself. Little James enjoys being a boy and is comfortable with his own gender. Somehow since the age of 3 his mother has changed his appearance by dressing him in girl clothes and calling him Luna. She has also gone as far as enrolling him in an elementary school as a girl.

    Even though James does not meet the criteria for gender dysphoria, (he is not consistent, persistent or insistent that he is anything other than his biological gender) his mother continues to encourage a gender transition, socially for now, and chemically, as soon as he is of age, which can be as early as 8 years old.

    James’ mother through in vitro, Dr. Anne Georgulas, a pediatrician, can now progress with her wish to forcefully transition the young boy by blocking his puberty and to also introduce cross-sex hormones into the unwilling and confused young child. The twisted and sick nature of any human altering the body and life of minor child is a true act of aggression. It is such a travesty that an inattentive jury who appeared to be inconvenienced held in the fate this precious boy’s future. Its looking like Mr. Younger will have to take classes on transgenderisim even though he’s against it philosophically, and religiously. The physician was able to outspend the father, and fly in paid testimonies from doctors who are supposedly well-versed in these new gender bending treatments. Having a Dr. in front of their name made them appear more credible to the bored and uninterested jury who looked like they were just wanting to leave. Deliberation was probably a pact to just get the hell out of there.

    1. she must really hate the dad to want to change the child or she just woke

      1. Munchausen by proxy – AKA attention whore. What an evil, evil cunt.

    2. Evil’s gonna evil.

    3. This sounds fishy beyond belief. I have a pretty good opinion of most juries, I find it hard to believe that any jury, especially in Texas, would punish a kid like this, and this report is too one-sided. I’d really like to hear the other side.

      1. Yeah, most of the time when you hear something about a jury ruling that sounds ridiculous, it’s because there’s some element that isn’t being reported that makes it make a lot more sense. This one definitely makes me suspicious as hell that the whole story isn’t being told here.

        1. It’s been a while, but I seem to remember the father in this case being a much bigger douche than is being represented here, and that the notion that the kid is dressing like a boy by his own choice when he’s with the dad is greatly exaggerated.

          At the very least, I seem to recall the mother trying rather hard to keep this out of the media, whereas dad leapt at the opportunity to be the center of a cause.

          1. The mother is about to chemically castrate her child. He is 7. Think she wins the raging bitch award.

            1. So claims a biased one-sided report. Like I said, I want to hear the other side before sweeping a jury under the bus.

      2. There are parts of Texas that are as liberal as anywhere in CA or NY.

        Which is why Texas is going to turn blue sooner or later.

        1. The cities are dark, dark blue. Everything else is crimson.

      3. We have a disagreement between the parents on wat is going on with the kid but the jury rules in favor of the parent who wants to start a dubious medical treatment that will permanently damage the kid’s healthy body development. Whatever may be going on with the parents, this jury verdict is wrong.

    4. Best outcome of the worst-case scenario: the mother succeeds in the forceful gender make-over, and 10 years later the child succeeds in a revenge killing.

    5. Since when are there juries in family court? is Texas different than most states in this regard?

  7. “The mystery surcharge adds up, especially for cost-conscious, working families. If oil companies are engaging in false advertising or price-fixing, then legal action should be taken to protect the public.”

    Maybe he should investigate why stores in bad neighborhoods charge higher prices than stores in good neighborhoods. Gas stations in other states can afford to charge less than gas stations in California because they don’t have to run the risk that evil greedy crooks like Gavin Newsom might swoop in at any moment and expropriate their profits. How the hell “If we think you’re making too much money we’re gonna royally fuck your shit up” is supposed to somehow encourage gas companies to treat the California market as less risky than it is is beyond me.

  8. Gov. Gavin Newsom, the crude oil that makes the gasoline in California cost about the same (except that which is produced in California) what it does in the rest of the country and even in some foreign nation. The price of unleaded gasoline in Texas is about 2.50/gallon. The federal gas tax is the same nation wide. So look at your state and local taxes to determine why your prices are so much higher. Now if you are using California crude refined in California then look again at the state and local taxes. Gasoline refined in a foreign refineries compete with gasoline refined in the rest of the US markets so again look at the taxes that is added in California and you will find the answer why your gasoline cost so much.
    But since you are trying to get everyone to switch to electric autos I would have thought you would have added another couple of dollars state taxes to your gasoline. Gasoline in Europe is much more expensive than it is in most of the US and it is because of the local taxes and value added taxes that cause it to be so.

  9. If Trump promised to build the wall just outside the I-5 corridor in California, he’d probably get Colorado, New Mexico, Oregon, and Washington in the electoral college.

    1. Not if Portland and Seattle had anything to say in the matter.

  10. I am a native Californian, born and raised in Mountain View. I am still trapped–I mean, I still live–next door in Sunnyvale. So when my Fearless Leader endorses all the exorbitant gas taxes and costly regulations on our gas supply, then pitches a hissy fit because gas prices are, ya know, HIGH–well, friends, I can only come up with a Typical California Solution. You know those olives they put in martinis? I SAY WE BAN THEM!!!!!!!!!!!!!!!!!

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  12. When I saw the headline, I thought I’d somehow switched to the Babylon Bee site.

  13. Shockingly, Newsome wants to redirect voter anger over higher gas prices to the evils of business rather than the government policies his party has promoted and implemented whose intent and goal has been to artificially raise gas prices.

    Either that or he is an idiot.

    1. He is not an idiot, the Californians who voted for him and are now pissed off at the high gas prices, but believe that it’s all Big Oil’s fault, are the real idiots

  14. Disclaimer: I hate Newsom and California Democrats.

    Having said that, this has to be the best example of ballsy chutzpah I have ever seen.

  15. Everything is so terrible and unfair.

  16. All this over two cents! 75 cents higher than national average, 40 cents due to taxes, 10 centsdue to higher crude prices in CA, and 23 cents for retailer and refiner margins, that only leaves 2 cents per gallon unknown. As a previous commentator said let’s come up with a California Solution to the problem. Ban Californians from voting for leftist idiots.

  17. I lived in CA for many years, and this is an annual exercise that politicians go through to a) make it look like the politicians are looking out for their constituents’ interests and b) make the oil companies out to be the bad guys.

    And the people never catch on.

  18. What an idiot even for a California liberal.
    Hey, Mr. Gavin.
    How about looking into the California state legislature’s laws that were passed some time ago, or am I asking for the earth, moon and stars?

    1. My thoughts exactly.. How stupid does someone have to be to go from, “Lets tax corporations to death and make them pay for everything” and then 20-seconds later say, “The price of corporate goods are going up and we don’t know why? They must be greedy.”

      My dog has more common-sense than that.

      1. While the evil oil companies are decried for their profits, largely unreported is that they pay more in taxes, than they reap from their business.

    2. Well, no….but are ARE asking for said moon on a sterling silver platter with a diamond-studded tiara atop it. (I’m stuck in California, I know from whence I speak)

  19. Government taxes at the local and national level add nearly $1.00 per gallon to the price of gasoline.

    California requirements for different grades of gasoline from….you know….the rest of the country increases the cost of manufacturing per gallon over other grades of gasoline in the other 49 states.

    Gasoline refiners make a few pennies per gallon in profit.

    Profiteering must be the reason for gas prices and we must investigate.

  20. Federal minimum wage is $7.25/hr. CA minimum wage is $11/hr for companies with 25 employees or less, $12/hr for companies with more than 25 employees.

    It’s a complete mystery as to why CA retailers might need a bigger markup on the gasoline they sell.

  21. I googled “Newsom identifiable gasoline prices” and got an ABC7 (LA) story about Newsom’s letter/tweet and inexplicably high gas prices. In the website’s sidebar, I noticed some links to other stories, one of which was As gas prices rise, LA officials call on state to phase out oil, gas drilling
    Case closed.