The California State Assembly today passed a bill that would authorize the state's energy regulator to require refiners to maintain minimum gasoline inventories, the latest measure in governor Gavin Newsom's ongoing legislative efforts to mitigate price spikes at the pump.
The assembly today passed AB X2-1 with a 44-17 vote, sending the bill to the California Senate for committee and then floor hearings.
The bill, if passed by the Senate and signed into law by Newsom, would authorize the California Energy Commission (CEC) to regulate, develop and impose requirements for in-state refiners to maintain minimum stocks of gasoline and gasoline blending components. The CEC would have the authority to penalize refiners who fail to comply.
The bill comes on the back of a transportation fuels analysis by the CEC's Division of Petroleum Market Oversight (DPMO) that concluded days of refined product supply in California is a key driver of price spikes.
A minimum road fuels inventory requirement is unprecedented in the US but has been implemented in various forms in Australia, New Zealand, the Philippines and Mexico.
Proponents of the bill say maintaining "normal" inventory levels of gasoline will mitigate against price spikes for consumers. Critics, such as the west coast refining industry, say the government has misdiagnosed what it a broader supply problem for California where limited refining capacity and import infrastructure have created a "fuel island".
