California lawmakers to investigate steep gas prices, accuse oil companies of ‘ripping off’ motorists

SACRAMENTO —  With steep gasoline prices still stinging Californians at the pump, Democratic Assembly Speaker Anthony Rendon on Monday announced a legislative inquiry to determine if oil companies are “ripping off” drivers.

Combined with the highest inflation rate in four decades, California’s highest-in-the nation gas prices remain a volatile political issue in the midst of an election year, and Republican lawmakers continue to attack the Legislature’s Democratic leadership for failing to take quick action to provide relief.

Rendon said the Assembly select committee will consider what measures the state can enact to reduce gas prices and “stand up to the profiteers who are abusing a historic situation to suck profits from California’s wallets.”

Committee hearings are expected to begin in coming weeks and could run through November.

“It is no secret that Californians are enduring financial pain at the pump. Amidst global uncertainty, supply chain challenges and COVID there are questions as to why gas prices are at an unprecedented high with no apparent end in sight,” said Assemblymember Jacqui Irwin (D-Thousand Oaks), who will chair the committee. “California leaders must protect consumers from further harm.”

Republican Assembly Leader James Gallagher called the inquiry “another dead-end study.”

Republicans for months have been pushing for a temporary suspension of California’s 51-cent-per-gallon excise tax on gasoline, including a small increase scheduled for July 1, arguing that it would provide immediate relief to California drivers.

Newsom and Democratic legislative leaders have rejected the idea.

Rendon on Monday said doing so would cut off funding for much-needed infrastructure projects and cost jobs. He added that there’s no guarantee that the oil companies would pass that savings on to drivers.

Assemblymember Kevin Kiley (R-Rocklin) dismissed that reasoning, saying that other states already have suspended gas taxes and brought immediate relief to drivers. On Monday, President Biden also said he is considering enacting a federal gas tax holiday to lower gas prices nationwide.

“It’s pretty amazing the level of gymnastics that the [Democratic] supermajority and governor here are willing to do to sort of avoid taking the easiest, simplest, most meaningful and most commonsense step that’s available to us,” Kiley said. “We have the most expensive gas prices in the country by far, that’s not because oil companies are treating California differently than other states.”

As part of the ongoing budget process, the governor and Democratic legislative leaders continue to negotiate over how to ease the financial pain faced by Californians with a new batch of tax rebates.

The Senate and Assembly’s budget calls for returning $10 billion to Californians, with $8 billion set aside for rebates, $1.3 billion for small businesses and nonprofits and $600 million in tax credits for the state’s lowest-income residents and workers who pay union dues.

Newsom wants to provide more money in rebates to more Californians. The governor’s May budget plan called for $400 for each registered vehicle owner, with a maximum of $800 for anyone with more than one vehicle. Newsom’s proposed rebates, which would total $11.5 billion, would not include any income limits but would exclude vehicles over a certain value. His plan calls for an additional $750 million for free or reduced public transit.

Rendon said the Assembly and Senate are close to reaching an agreement with the governor on the details of the relief package.

The select committee’s inquiry into high gas prices follows an earlier investigation Newsom asked the California Energy Commission to conduct in 2019. The commission later published a report that found that the big corporate gas stations charge “higher prices for what appears to be the same product” and raised the possibility that competing oil companies were illegally price-fixing.

After the report was released, Newsom asked the state attorney general to investigate whether California’s leading oil and gas suppliers are involved in price fixing or other unfair practices. The status of the investigation remains unclear.

Times staff writer Taryn Luna contributed to this report.