Gavin Newsom Proposes Plan to Stop ‘Price Gouging’ by Oil Companies

California Gov. Gavin Newsom (D) called the legislature into special session Monday to introduce a plan to stop “price gouging” by oil companies by capping their profits from gasoline and returning the surplus to consumers.

Newsom, whose family has oil industry ties, took to Twitter to tout his “first in the nation” effort to punish what he claims is an effort by the industry to exploit consumers, even as his party claims credit for falling prices:

As the San Jose Mercury News notes, however, Newsom’s plan is long on demagoguery and short on specifics:

The plan, which Newsom termed a “price gouging penalty,” would see the state establish a maximum profit margin on oil refiners and issue civil penalties for excess profits. Any revenue generated would be put into a “Price Gouging Penalty Fund” and sent back to Californians.

But Newsom’s proposal leaves blank the key sticking points, including the specific profit ceiling and penalty rates. Those questions will be central to a heated debate in Sacramento this winter that will test the newly seated Legislature’s resolve in opposing one of the state’s top lobbying interests.

…

Oil industry and consumer advocates are already waging a war of words over whether the state’s oil refiners are “gouging” drivers or are actually suffering under California’s transition to renewable energies and whether a profit cap will save drivers money or make gas supply shortages increasingly common. Both sides are playing politics over whether Newsom’s plan is a “penalty” or a new “tax.”

As far as “price gouging,” Democrats refused to cancel or postpone a hike in the gas tax earlier this year. Instead, Newsom’s administration sent $400 “rebate” checks to consumers — right before the election.

Gas prices are high in California because of taxes and heavy regulations. One industry leader responded to Newsom’s claims of “gouging” earlier this year by noting that “California is the most expensive operating environment in the country and a very hostile regulatory environment for refining,” and that it “requires refiners to pay very high carbon cap and trade fees and burdened gasoline with [the] cost of the low carbon fuel standards.”

Newsom is thought to be planning a future run for president, and has recently made a number of statements that have little effect in policy terms but that boost his national profile as a “progressive” leader.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.