California may punish oil companies for high gas prices

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California lawmakers on Thursday will vote on whether to allow penalties on oil companies for price gouging at the pump, a first-in-the-country proposal aimed at stopping the kind of spikes last summer that caused some drivers pay up to US$8 per gallon as the industry reaped super-sized profits.

Gov. Gavin Newsom, a Democrat seen as a possible presidential candidate beyond 2024, has used all of his political muscle to get the bill this far by making in-person pleas with state lawmakers in private ahead of Thursday's first vote in the state Senate.

California's gasoline prices are already higher than most other states because of taxes, fees and environmental regulations. California's gas tax is the second-highest in the country at 54 cents per gallon. And the state requires oil companies make a special blend of gasoline to sell in California that is better for the environment but is more expensive to produce.

But that idea went nowhere in the state Legislature as lawmakers feared that whatever limit they chose would cause chaos in the market, causing refiners to make less gasoline that would in turn increase prices at the pump. The bill represents an agreement between Newsom and the Democratic lawmakers who control a majority of seats in the state Legislature. Republicans, who don't have enough members to block bills from passing, blasted the proposal on Thursday.

 

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They should all pull out of California simultaneously. See what happens.

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