Consumer Watchdog To Support CA Gov's Minimum Gas Inventory Proposal, Points To State Estimate That It Will Cost $25 Million To Save $1 Billion

SACRAMENTO, Calif., Sept. 26, 2024 /PRNewswire/ -- Consumer Watchdog President Jamie Court will offer his support at Assembly hearings today for ABX2-1 (Hart), Governor Newsom's proposal to have the state require minimum inventories for California oil refiners to avert price spikes that result when refineries go down.

Court pointed to testimony from California Energy Commission Vice Chair Siva Gunda from last week's hearing that the proposal will cost refiners no more than $25 million to maintain the added inventories and will result in potential savings of $1 billion or more to consumers.

"A proposal that saves drivers $1 billion at a cost of no more than $25 million is a no brainer for the state," said Court. "The last price spike in 2023 cost California consumers an extra $2 billion. If by requiring refiners to keep two days extra supply on hand, we can save half that amount, the minimum inventory requirements will have a huge return for the state. Oil refiners are only using 55% of their storage today, so they do not need to build storage to maintain minimum inventories that they routinely maintain today. The refiners voiced no reasonable objections to the proposal at last week's hearings."

At last week's special session hearings, Court testified on the need for oil refiners to maintain 15 to 18 days of supply and the reasons why it saves consumers from price and profit spikes.

"Governor Newsom's pioneering proposal is one more check on the profiteering of the 4 oil refiners that make 90% of California gasoline," said Court. "That level of consolidation requires this level of added controls."

SOURCE Consumer Watchdog