California Governor Gavin Newson signed a law that aims to prevent sudden spikes in gas prices, a move that shows the effort of the Democrats to gain a leverage in the government's battle against the oil industry on fuel prices.
California's gas prices are highest in the country. The average national price for regular unleaded gas is $3.20 per gallon but Californians pay an average of $4.68 per gallon, according to the AAA.
The high rate is primarily due to environmental regulations and taxes, according to the Associated Press.
Findings from the Division of Petroleum Market Oversight in California prompted the new legislation. The findings noted that a spike in gas prices is primarily caused by an increase in global crude oil prices and unplanned outages at the refinery.
With the new law, regulators are now authorized to require refineries to have a certain amount of fuel on hand so that whenever they go offline for maintenance, it could help avert a sudden spike in gas prices. Billions of dollars could be saved according to proponents of the law.
Newsom signed the law at the state Capitol. He took a swipe at the oil industry, which fought the legislation.
The governor claimed people in the oil industry "continue to lie, and they continue to manipulate."
He also claimed that the industry has been "raking in unprecedented profits because they can."
Newsom underscored that the new legislation had nothing to do with politics. He signed the new law weeks ahead of the elections in November.
Opponents noted that the new law may actually raise overall gas prices. They also claim the safety of workers may be threatened since it gives the state more oversight when it comes to scheduling maintenance operations at a refinery.
Catherine Reheis-Boyd, president of the Western States Petroleum Association, said that legislators failed to understand the industry and what drives high gas prices.
"Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands," she added, ABC News reported.
