A law enabling California to regulate its profit margins on gasoline went into force on Monday.
After the Golden State saw higher-than-average gas prices last summer, the law was introduced during a special legislative session last year.
The California Energy Commission may establish a maximum profit margin for oil refiners and impose fines on those who go over it, but Senate Bill 2 does not make this mandatory.
The commission must, however, evaluate whether a cap would lead to an imbalance in the state’s supply and demand for gas or would result in higher prices than they otherwise would be.
The law also tightens reporting guidelines for refineries and other players in the oil sector, requiring them to give advance notification of any scheduled repair.
The tweet below verifies the news:
A law allowing the state of California to set a cap for profit margins on gasoline took effect Monday. https://t.co/icPlcaeG4H
— FOX 5 San Diego (@fox5sandiego) June 28, 2023
One of the most frequently reported causes of higher gas prices in 2022 was the simultaneous maintenance shutdown of several oil refineries.
According to AAA, Washington overtook California as the state with the most expensive gas before the bill went into force.
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