California authorities suggest postponing the limitation of refinery profits for a five-year period.
The California Energy Commission (CEC) has proposed a draft resolution that, if passed, would delay the authority to impose a profit cap on gasoline refiners for a period of five years. This draft resolution is one of the centerpiece achievements of Gov. Gavin Newsom's 2023 push.
The draft resolution, adopted on August 22, 2023, proposes to suspend the jurisdiction over the profit rate and fine for gasoline refiners for the aforementioned five-year period. This suspension would shelve the gross gasoline refining margin and penalty, a key element of SB X1-2, a 2023 law signed by Gov. Newsom aimed at curtailing gasoline price spikes in California.
However, it's important to note that the draft resolution does not permanently eliminate the CEC's authority to set a gross gasoline refining margin and penalty. The CEC retains its ability to revise or rescind the draft resolution, providing flexibility for future decisions regarding the gross gasoline refining margin and penalty.
The draft resolution differs from the oil industry's recommendation of a 10-year pause. Instead, it offers a more flexible approach, allowing for potential future adjustments to the gross gasoline refining margin and penalty by the CEC.
Published on Thursday afternoon, the draft resolution is not an irreversible decision. The CEC has the power to change it, should circumstances necessitate a reconsideration of the profit cap on gasoline refiners.
The draft resolution was proposed by the California Energy Commission and is related to SB X1-2. While it takes off the table one of the key elements of the law, it does not completely take off the table the CEC's authority to set a gross gasoline refining margin and penalty.
The draft resolution was published on Thursday afternoon. The California Energy Commission encourages public input and discussion on this matter, further details of which can be found on their official website.
