Arizona Gas Prices Set to Skyrocket Due to Gavin Newsom’s Idiotic Plan

Increasing refinery inventories means higher prices for everyone, including Arizonans.

Jon Gabriel
| opinion contributor

Governor Gavin Newsom is not a smart man.

OK, he needs a few more brain cells to get re-elected governor of our most populous state. But when it comes to basic economics, he’s a complete idiot.

His latest idea is to lower the price of gas in the stupidest way possible.

California, as everyone knows, has the highest average price per gallon in the country. According to AAA, it’s $4.75. Compare that to $3.43 in Arizona, which is still slightly above the national average.

But if Newsom gets his way, prices in Arizona will rise dramatically.

Newsome’s plan would hurt Arizona and Nevada

The former Golden State governor wants to boost refinery stockpiles, saying it will prevent the “profit spikes for Big Oil” that somehow always hit California harder than anywhere else.

Refineries would be forced to store excess reserves, artificially reducing supply, leading to higher prices. But this time, all the countries that receive oil from those refineries would pay more.

Those reserves can’t be touched unless Newsom wants to improve his poll numbers and opens the spigot. That would temporarily lower the price at the pump, which would quickly return to its naturally higher rate. Sacramento would control gas prices, not just in California but throughout the region.

The idea is so stupid that it has sparked a bipartisan backlash. Gov. Katie Hobbs joined Nevada Republican Gov. Joe Lombardo in telling Newsom to back off.

“We are concerned that introducing a requirement to maintain stocks at refineries will directly increase fuel costs for all of our constituencies and deepen economic instability in the region,” the joint letter reads.

It also cited a California Energy Commission report that the plan “could artificially create shortages in downstream markets,” namely Arizona and Nevada.

Lombardo added that “Nevada and Arizona residents should not have to pay the bill for California’s misguided policies — especially when it comes to higher gas prices.”

Hobbs agreed. “Arizona residents are struggling with a high cost of living, and we can’t afford to see another price increase.”

Reducing gas supplies will cause prices to rise. That’s economics 101

Refineries are also sounding the alarm.

The Western States Petroleum Association put it bluntly: “There is bad regulation, and then there is regulation so bad that industry experts, the California Energy Commission, and anyone with basic economics can clearly see the harm it will do to consumers.”

Unfortunately, Gavin Newsom lacks basic knowledge of economics.

Just last year he promised to “root out illegal price gouging by greedy oil companies.” Sure enough, the California Energy Commission found no price gouging. Oh boy, what a shock.

But at least Newsom gave the commission more work, which it will have to fund with taxpayer money.

Arizona can’t be picky about power: We need everything we can get

Of course, the easiest way to lower the cost of gasoline in California is to lower the nation’s highest gas tax.

Since June 2017, when it was 27.8 cents a gallon, it has more than doubled. It now stands at 59.6 cents a gallon.

Perhaps California could lower its high gas tax

In addition, California residents pay a federal fuel tax of 18.4 cents per gallon, plus contributions to the state’s emissions trading program, sales tax and an underground storage fee.

That’s $1.21 more per gallon than gasoline alone. Incidentally, Newsom raised the state’s gas tax another 1.7 cents in July.

Another improvement would be to allow more refineries. In 1984, California had 34 such facilities. Today, it has just 14.

This has caused a drastic reduction in supply, not only in that state but also in Arizona and Nevada.

This, combined with declining oil and gas production in California, has made the entire region more vulnerable to changes in fuel supplies, affecting prices.

If Gov. Newsom wants to repeatedly hurt his state, fine. They elected him. But the voters of Arizona and Nevada did not.

And if he wants to take a remedial course in Economics 101, I’ll foot the bill.

Jon Gabriel, a Mesa resident, is the editor-in-chief of Ricochet.com and a contributor to The Arizona Republic and azcentral.com. On X, formerly Twitter: @exjon.