Gov. Gavin Newsom has called for a special session of the Legislature to address the pernicious problem of gasoline price spikes at the pump — and save Californians hundreds of millions of dollars annually.

Price spikes on consumers are profit spikes for oil companies, and Newsom’s office said they’re overwhelmingly caused by refiners not backfilling supplies when they go down for maintenance.

If this proposal had been in effect last year, the Governor’s Office said Californians could have saved hundreds of millions — if not billions — of dollars at the pump as evidenced by a Division of Petroleum Market Oversight, or DPMO, analysis, shown in the chart below.



“It should be common sense for gas refineries to plan ahead and backfill supplies when they go down for maintenance to avoid price spikes,” Newsom said. “But these price spikes are actually profit spikes for Big Oil, and they’re using the same old scare tactics to maintain the status quo. We look forward to working with our Legislative partners during the special session to act on this urgently needed legislation. Calling the session now allows the Legislature to begin that work immediately so that the state can resolve this important matter to establish the necessary rules to prevent price spikes next year and beyond.”

Senate President pro Tempore Mike McGuire (D-North Coast) said the Legislature has been working on this California Made and Clean Energy Package for months, and some of these proposals have been in discussions for the better part of a year.

“The Senate always had the votes and was ready to get these important measures across the finish line this legislative year and deliver the relief Californians need at the pump and on their electricity bills. We won’t be convening a special session this fall, but we look forward to continuing conversations with the governor and speaker about this critical issue in the days and weeks to come,” McGuire said.

Preventing gas price spikes

The governor’s special session is set to focus on passing his plan to save Californians money at the pump.

It would authorize the California Energy Commission, or CEC, to require petroleum refiners to maintain a minimum inventory of refined fuel throughout the distribution chain to avoid supply shortages that create higher prices at the pump for consumers.

It would also authorize the CEC to require refiners to plan for resupply during scheduled refiner maintenance. Text of the proclamation calling for a special session is available here.

Following gasoline price spikes in 2022, Governor Newsom called for a special session and worked in partnership with the Legislature to sign into law a package of reforms holding Big Oil accountable. California’s new watchdog found that higher gasoline prices were caused by a suspicious market transaction, refinery maintenance without properly preparing for it, and more.

In January of this year, the watchdog sent Gov. Newsom and the legislature a letter outlining specific proposals to reform California’s gasoline spot market, which included a minimum inventory requirement to prevent price spikes due to lack of stable supply.

The state’s gasoline price watchdog also found that, in 2023, gasoline prices spiked largely due to refineries going offline without adequately planning to backfill supplies, which caused refining margins to spike as spot and retail prices jumped — indicating that refinery margins made up the largest proportion of the price spikes between July and September 2023.