Gavin Newsom can’t prove gas pump pricing, but wants new refinery law – Daily News

It’s time to expose the farcical efforts of California politicians — especially Gov. Gavin Newsom — to reduce the state’s high gas prices.

Newsome’s demand that the Legislature, which adjourned in early September, reconvene for a special session on gas prices continues his crusade against the oil industry, accusing it of inflating prices.

But Newsom has never produced any convincing evidence of such behavior, nor has it been confirmed by people who have seriously examined the factors that cause California’s gas prices to be the highest or near the highest of any state.

Severin Borenstein, a UC Berkeley economist considered the state’s leading expert on the issue, analyzed the difference in a 2023 study, pointing out that California’s direct and indirect fuel taxes total nearly $1 a gallon — 70 cents more than the national average — and the state’s unique fuel blend used to combat smog adds another penny.

Borenstein’s calculations leave what he calls a “mysterious gas surcharge” of about 43 cents a gallon, which can’t be directly attributed to oil prices, California taxes or other obvious factors. But at least some of it reflects the relatively high costs of doing business in California—rents, electricity and other utilities, wages and regulatory overhead, for example.

Newsome’s latest effort is to demand that lawmakers order refiners to stockpile more fuel as a hedge against price spikes caused by refinery outages or other factors.

At first glance, this sounds plausible, but it assumes refiners have the storage capacity to comply with such a law or could easily expand storage. However, storage is not without costs that could further drive up retail prices.

The state Energy Commission in a recent analysis said Newsome’s proposal could “artificially create shortages in consumer markets” and “raise average prices.”

The commission states that “there may be a need for additional storage to maintain supply resilience over the next two decades, but such investments create the risk of stranded assets. More analysis is needed to determine whether the benefits of increased supply resilience are worth the investment in the near term.”

Newsom wants the Legislature to act immediately, without “further review,” which is the antithesis of cautious lawmaking. Republican lawmakers are semi-complicit, agreeing with Newsom that there is a gas price crisis. But they are unwisely proposing to cut or eliminate gas taxes, which are essential to restoring California’s neglected highway system.