Are oil companies ‘profiteering’ during war? California bill aims to find out
A California bill that aims to stop gas price gouging during wars is facing stiff opposition from a broad range of business, housing and other groups who say the measure is too broad and could lead to widespread economic damage.
Currently, it is a misdemeanor for businesses to sell gas, medical supplies, housing or other goods and services at more than 10% of the price they were offered before certain emergencies, including earthquakes, wildfires and pandemics, unless the companies can justify the spike. Violating the law can also result in jail time and a $10,000 fine.
The proposal, authored by state Sen. Josh Becker, D-Menlo Park, would add war to the list of events that can prompt the state’s anti-price gouging rules. He said it was inspired by the major increases in gas prices Californians have seen at the pump during President Donald Trump’s war with Iran, which began in February.
“Californians should not become collateral damage in an international conflict,” Becker said during a news conference Monday.
Consumer Watchdog, an advocacy organization, reported that California gas prices have been $1.50 higher than the cost of fuel nationally for 13 weeks so far this year. That is more than double the number of weeks in the last two years combined.
“Californians are getting price gouged at the pump and it’s because of oil refiners wartime profiteering,” said Carmen Balber, the group’s executive director.
Jim Stanley, a spokesperson for the Western States Petroleum Association, said in a statement that “imposing an arbitrary price cap would make us a less attractive market, risking shortages of the energy our economy depends on.”
The group is not fighting the bill alone.
Other business trade groups, including the California Chamber of Commerce, worry that the measure could be used on an almost ongoing basis. It would apply to wars that are declared by Congress, but also when the United States is engaged in “active military operations against any foreign power, whether or not war has been formally declared.” It would also apply to situations in which the federal government is supporting the United Nations with armed forces.
Debra Carlton, a lobbyist for the California Apartment Association, said during a hearing Tuesday that military conflicts are different from wildfires, floods and earthquakes and that imposing long-term price caps would have “serious unintended consequences” that would discourage owners from renting units.
Becker, during the hearing, agreed to amend the bill to note that the state’s attorney general would need to find a sufficient connection between a war and price increases in California that he argued made the language more clear on when it would apply.
The senator could have an unlikely ally in his fight. Trump recently posted on his Truth Social account that big oil companies were not dropping gas prices fast enough, and that Americans were being gouged.
“Gasoline prices better start going down a lot faster than what I’m seeing!” he said, adding that he had instructed the Department of Justice to look into the matter.
