Arizona Gov. Katie Hobbs and Nevada Gov. Joe Lombardo are urging California Gov. Gavin Newsom to reconsider a bill that could raise gas prices in their states. In a joint letter sent Tuesday, Sept. 10, Hobbs and Lombardo expressed concerns that the proposed legislation, which aims to regulate oil refiners in California, might inadvertently increase fuel costs and cause supply issues in Arizona and Nevada. Both governors said their states rely heavily on California pipelines for fuel.
The bill, currently under consideration by California lawmakers, would give the California Energy Commission the authority to enforce inventory requirements for refiners and impose civil penalties for non-compliance.
Newsom is advocating for these regulations as a means to stabilize fuel supplies and prevent sudden price spikes due to supply shortages. He argues that requiring refiners to maintain extra reserves will avoid shortages and keep gas prices in check. Newsom plans to fine refiners who do not comply, with the penalty funds being returned to consumers.
“Price spikes at the pump are profit spikes for Big Oil,” Newsom said. “Refiners should plan ahead and keep supplies stable instead of just trying to boost their profits.”
However, neighboring governors argue the adverse effects are too significant.
“The people of Nevada and Arizona should not have to foot the bill for California’s misguided policies — especially when it comes to higher gas prices,” the letter said.
“Lowering fuel costs is a bipartisan issue, and I’m grateful to partner with Governor Hobbs as we fight back against policies that will raise prices and cause regional economic disruption,” Lombardo said.
This proposal follows a previous failed attempt by Newsom to tax excess profits from oil companies and a recent law aimed at increasing transparency in the oil industry. With only two weeks remaining in the legislative session, the fate of Newsom’s proposal remains uncertain.