A bill in the California Senate intends to prevent price
gouging by big oil companies – not just retail fuel stations.
Attorney General Bill Lockyer and Assembly Speaker Fabian
Nunez offered the measure in response to prices at the fuel pump that have
jumped by more than $1 per gallon since the first of this year.
California law already authorizes the attorney general to
investigate allegations of price gouging at the retail level in the state
during emergencies declared by the governor or president. Retailers are
prohibited from increasing prices for goods and services, such as food,
medicine and fuel, more than 10 percent during a 30-day period after a declared
The bill would give the attorney general 60 days after an
emergency to initiate an investigation into alleged price gouging. The entire
fuel supply chain – including oil companies, refineries and fuel distributors – would be reviewed.
“If we suspect there’s price gouging by the oil companies
going on, we need the tools to investigate and determine if we’re being ripped
off,” Nunez, D-Los Angeles, said in a written statement.
An emergency could be declared when an “abnormal market
disruption,” such as a cutoff of shipments by an oil producer, increases
wholesale and retail prices. The governor now can act only during such
circumstances like severe weather, earthquakes and acts of war or terrorism.
“The state’s anti-gouging law current does not allow law
enforcement to hold accountable oil companies that profiteer when consumers are
most vulnerable,” Lockyer said in a written statement. “This bill fixes that
The bill also would allow the governor to declare an
emergency, even if it happened elsewhere – such as a hurricane on the Gulf Coast – disrupting production.
Violators would face fines up to $10,000 and one year in
California isn’t the only state this year to look into
adopting anti-gouging protections. The governors in Vermont and Wisconsin have approved protections while their counterparts in Colorado and South Carolina vetoed similar efforts. Another one is nearing passage in Louisiana.
The California bill – AB457 – is in the Senate Rules
– By Keith Goble, state legislative editor