SACRAMENTO, Calif. — California has the highest average gas prices in the nation, and state lawmakers want to find a way to bring them down.
Governor Gavin Newsom called a special session on the topic. In a purely informational hearing Wednesday, the newly formed Assembly Committee on Petroleum and Gasoline Supply heard from industry experts to learn about California’s fuel production and delivery system.
Nine refineries produce about 90% of California's gasoline and diesel, experts said. If even one of those goes down for planned or unplanned maintenance, it can hurt supply and drive up prices for consumers.
Committee members heard from Tom Robinson, chairman of Bay Area-based Robinson Oil.
"We end up with price spikes. There's no doubt about that, and we end up with some outages and we end up with some problems,” he said, “but generally in those situations, there's profit incentives to solve them as quickly as we can."
He said consumers will sometimes see price spikes around April as refineries switch over to a summer blend of fuel.
Some lawmakers call that and other foreseeable supply chain disruptions unacceptable.
"Without swift action, consumers will continue to bear the brunt of fuel price fluctuations,” said Democratic Assemblymember Gregg Hart.
He co-authored a bill that would require refineries to keep extra fuel in storage, a minimum inventory, to bridge the gap when the supply drops.
Stanford University Economics Professor Neal Mahoney also offered his expertise to committee members.
“When we have a price spike… a responsible system would have product on hand,” he said acknowledging that doing so might not bring an oil company maximum profits. “But in terms of serving the California people by preventing budget-busting price spikes, I think that is something that would be desirable."
Republicans and the oil industry push back on Democrats' 15-day minimum inventory proposal, saying it would drive up prices for consumers.
"Instead of focusing on the solutions that will actually drive prices down, we see policies that risk pushing them even higher,” said Republican Assemblymember Joe Patterson.
In a news conference Wednesday, Assembly Republicans laid out some of their proposals to lower gas prices, including suspending the state gas tax, which is used to help repair California's roads.
"To suspend the gas tax and save 60 cents a gallon but also backfill it with the general fund so the projects will continue; exempt gas from Cap and Trade and save 30 cents a gallon,” Patterson said. “Give drivers a rebate to offset high gas prices; give California some transparency into the real cost of these taxes and regulations; and boost California energy production and make it easier to build new infrastructure."
This public informational hearing continues Thursday at 10 a.m. at the Swing Building on O Street and 10th Street. It will also be streamed online.
Next week, the committee will have a hearing on the bills introduced in this special session. On Oct. 1, a floor session is scheduled.
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