https://patch.com/california/sanramon/s/if016/newsom-relaxes-oil-refinery-rules-blasts-industry-as-prices-soar?utm_source=alert-breakingnews&utm_medium=email&utm_campaign=alert

 

” CALIFORNIA — Earlier this week, the price for an average gallon of gas shot up sharply — 15 cents on Thursday. It has risen steadily each day since. On Friday, Gov. Gavin Newsom moved to ease soaring prices.

Newsom announced that oil refineries could start selling more polluting winter-blend gasoline ahead of schedule to ease soaring fuel prices, directly contradicting his own goals for reducing climate pollutants.

The average cost of a gallon of gas was $6.35 in California on Saturday, far above the national average of $3.80, which stayed still overnight while California’s prices rose again, according to AAA. Newsom administration officials said the difference between state prices and the national average has never been larger.

The relaxation of refinery regulations could increase supplies by 5 to 10 percent since refiners have already started to produce and store the gas, Newsom said.

“Any impacts on air quality caused by this action are expected to be minimal and outweighed by the public interest in temporarily relaxing” the limits, the air board said in a statement.

Newsom also lambasted oil companies, calling on lawmakers to pass a new tax on oil company profits and return the money to state taxpayers. Newsom’s office provided few details on the proposal and lawmakers don’t return to the Capitol until January.

“They’re ripping you off,” he said of the oil industry in a video posted to Twitter.

Alternatively, oil industry representatives have countered that it is state regulations that cause higher prices in California than the rest of the country.

The summer blend of gasoline that refineries are required by law to produce in the hotter months costs more money to make but is designed to limit pollutants like smog. Most refineries can’t switch to the winter blend until November.

Prices could go down 15 to 20 cents after switching from summer to winter blends, according to Doug Shupe, a spokesman for the Southern California Automobile Club, an affiliate of AAA.

“If these prices go up to $7 a gallon, a 15-cent drop is not really going to mean much to drivers,” Shupe said.

The state reveled in a nearly 100-day string of lowering prices, but that streak was broken earlier this month and gas prices have been on the rise ever since. AAA officials have cited tight supply at refineries across the West Coast and Midwest.

“A string of planned and unplanned refinery maintenance issues has severely tightened fuel supply in California,” Shupe said. “…Until the refineries are fully operational again, supply is going to be tight and will cause pump prices to be volatile.”

West Coast fuel inventories are at the lowest level in about a decade, according to the Energy Information Administration.

Hurricane Ian has also managed to impact gas price. Distribution became limited in impacted areas due to a lack of electricity and flooded roads and highways, AAA reported.

President Joe Biden on Wednesday also warned oil and gas companies against increasing prices for consumers as Hurricane Ian lashed Florida’s southwest coast.

“Do not, let me repeat, do not use this as an excuse to raise gasoline prices or gouge the American people,” Biden said at the start of a conference on hunger in America and just hours before the hurricane made landfall as a massive Category 4 storm.

Newsom’s actions to address the economic crisis of skyrocketing fuel prices demonstrates a complicated reality for the Democratic governor as he attempts to pull the state away from a gas-powered auto-market.

In another attempt to respond to the economic reality, Newsom turned to generators and power plants that run on fossil fuels to help avoid rolling power blackouts during a heat wave — an action that went against his plans to scale back the use of such resources.

Starting in January, oil companies will be required to disclose their monthly profits to the state under legislation Newsom recently signed. Consumer Watchdog called on Newsom earlier this week to call a special legislative session to approve a tax on those profits.

Jamie Court, the group’s president, said he applauded Newsom’s efforts to deal with “an industry that’s out of control.”

Democratic leaders in the state Legislature said a windfall tax on oil profits deserves “strong consideration,” while Republicans said Newsom should immediately suspend the state gas tax to provide relief.

Many energy analysts believe that prices are more likely to rise than fall in the next few months. However, changes in sentiment about the economy, Russia’s war against Ukraine, and even hurricane season — always a threat to disrupt refineries along the Gulf Coast — make predictions uncertain.

“I suspect that we will see choppy prices for gasoline through year’s end, with some down days and up days,” said Tom Kloza of the Oil Price Information Service.

Kloza predicted that the next streak will be a run of price increases early next year, driven by investors, speculators and “the fear that there won’t be enough fuel to go around.”

The surge in prices caused financial pain for families and a political headache for both Newsom and the Biden administration.

Californians have been plagued by high prices on everything from groceries to gas over the last year. Starting this month, eligible residents will start receiving “inflation relief” tax refund payments, the state announced earlier this year.

The state’s Middle Class Tax Refund — which was approved as part of a 2022-2023 state budget surplus — will issue payments to more than 20 million Californians. Payments ranging from $200 to $1,050 will begin rolling out in October, according to the California Franchise Tax Board.

The funds will continue hitting bank accounts between October and January 2023 to help offset soaring gas prices and inflation.

The Associated Press contributed to this report.”

 

God help us.

GL