Newsom Proposes Fuel Reserve Mandate in California

Governor Gavin Newsom has introduced a proposal requiring California petroleum refiners to maintain a minimum fuel reserve to prevent supply shortages and resultant price spikes at the gas pump. This initiative, which comes in the final weeks of the legislative session, aims to hold oil companies accountable for profit spikes linked to reduced supply during maintenance periods. Newsom emphasized that had this plan been in place last year, Californians could have saved approximately $650 million in gas costs, as 63 days in 2023 saw refineries holding less than 15 days of gas supply. The proposal builds on previous legislation aimed at increasing transparency and regulating oil industry profits. It empowers the California Energy Commission (CEC) to enforce these requirements and impose penalties for non-compliance. Newsom's recent push reflects ongoing tensions between the state and the oil industry over high gas prices.