California adopts first-in-the-nation gas price-gouging penalty law for state’s oil industry

EWG applauds Gov. Newsom, lawmakers for taking the necessary steps to hold Big Oil accountable

SACRAMENTO – California Gov. Gavin Newsom today signed the first law in the U.S. to penalize oil companies for extracting billions of dollars from everyday consumers through gas price gouging schemes.

Oil companies pricing structures have been designed to maximize the profits and to give their executives oversize compensation packages.

In December, the governor called a special session of the state’s legislature after sky-high gas prices had hammered the state’s residents for much of 2022, while the state’s five main oil refiners piled up billions in record windfall profits.

The Legislature acted swiftly last week once the governor advanced the California Energy Commission as the lead agency on the issue.

“We commend Gov. Newsom and lawmakers for their determination to take on Big Oil and its decades-long grip on the residents of California,” said Bill Allayaud, Environmental Working Group director of government affairs in California.

“Obscene price gouging by powerful oil refiners underscores the importance of this landmark law. It will bring much-needed transparency and accountability to the state’s fossil fuel industry,” he said.

The groundbreaking law will establish a new, independent watchdog as part of the California Energy Commission. It will be responsible for monitoring the state’s petroleum industry day-to-day activities.

The goal of the law is to make sure the state’s five main oil refiners do not artificially increase gas prices on consumers or engage in other mischief that can foist higher prices at the pump onto consumers.

The new watchdog division will have the authority to subpoena records from oil companies and enact civil penalties of up to $20,000 per day, or $500,000, for each submission if companies refuse to turn over the requested information. It will be empowered to refer violations by the fossil fuel industry to the state attorney general for potential prosecution.

Under the new law, state regulators will get more valuable information about supply chains. But they’ll also maintain the confidentiality of data that is considered a trade secret, thereby taking away one of the arguments the oil giants were making in opposition to the law.


 The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.

Disqus Comments

Related News

Continue Reading