Gavin Newsom's New 'Gas Price-Gouging Law' Flunks Basic Econ

There are better explanations for California’s high gas prices than “price gouging.”

<a href="https://commons.wikimedia.org/wiki/File:Gavin_Newsom_(47998164696).jpg">Gage Skidmore from Peoria, AZ, United States of America</a>, <a href="https://creativecommons.org/licenses/by-sa/2.0">CC BY-SA 2.0</a>, via Wikimedia Commons

Gov. Gavin Newsom (D-CA) took to Twitter earlier this week to crow about California ’s “first-in-the-nation” gas price-gouging law designed to prevent oil companies from overcharging consumers.

“A NEW independent watchdog — The Division of Petroleum Market Oversight — will monitor the industry to help ensure you’re not being ripped off,” Newsom tweeted. “Time to hold oil companies accountable.”

The legislation, which was signed into law in March and went into effect on Monday, requires refineries to send daily reports to the petroleum oversight division — all to protect consumers by shining “a light on price manipulation so Californians aren't vulnerable to the greedy whims of Big Oil," in Newsom’s words.

The idea that greedy oil companies are swindling consumers is alluring, especially since California has the highest gas prices in the country — about $1.08 more than the U.S. average, according to Jamie Court, the president of Consumer Watchdog.

But there are better explanations for California’s high gas prices than “price gouging.”

For starters, California consumers pay 83.5 cents in taxes and fees for every gallon of gas they pump, according to the Energy Information Administration — more than any other state with the exception of Illinois (85.8 cents per gallon).

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READ the rest of this article at The Washington Examiner.