California energy panel calls for transparency from refineries in effort to stem gas price hikes

Jessica De Nova Image
Wednesday, November 30, 2022
California panel calls for transparency in effort to stem gas prices
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As the holiday season kicked off, drivers in California braced to keep paying more than others across the country at the gas pump and the California panel held a hearing to find out why.

SACRAMENTO, Calif. (KABC) -- As the holiday season kicked off, drivers in California braced to keep paying more than others across the country at the gas pump. This week, the California Energy Commission held a hearing to find out why.

As of Tuesday, the national average was at $3.52 for a gallon of regular gas. Drivers in the Golden State on average were paying about a $1.50 more at $5.00 per gallon.

Some of it had to do with demand -- one of several factors closely examined Tuesday during a California Energy Commission hearing. A panel of experts in the industry explained the trends driving up the cost of fuel in recent years.

Gordon Schremp, a fuels specialist with the commission, said drivers have been using less gas for several years.

"Gasoline demand has been declining since 2017," Schremp said. "As was mentioned earlier, the primary reason has been a continued uptick of electric vehicles, or zero-emission vehicles in the light-duty fleet."

That downward swing went even further in 2020, when remote work from home turned into a norm because of the COVID-19 pandemic.

The decline in demand is only expected to continue in California. The vice chair of the Energy Commission, Siva Gunda, said it was important to make sure families that have already been hit that hardest weren't further affected.

"It is factual and pretty clear that we need to move away from fossil fuels and that move away from fossil fuels will destroy the current demand of gasoline and diesel and that needs to be understood, planned for and managed properly," Gunda said, "so we do not affect the communities that are already affected and burdened even more."

The panel matched price hikes with taxes, the geopolitical climate and the state's fuel sources, but could not pinpoint the exact driver of a so-called, "mystery surcharge" -- of about 40 cents per gallon -- that they explained has been around since about 2015, further emphasizing the need for transparency for things like contracts between refineries and their retail outlets.

"Those are the questions we have to dig into, but to do that, you need a entity that has real power to compel that information disclosure and to keep it private," said Severin Borenstein, a UC Berkeley Professor of Business Administration and Public Policy.

Throughout the meeting, several commissioners expressed disappointment after they said they invited some of California's refineries to participate, but none of their representatives showed up.