“But the source of high gas prices is simple: government restrictions on supply. “If gasoline providers do not maximize profits, they should be sued by their shareholders,” Cochrane told FOX Business. John Cochrane, a Hoover Institution senior fellow, argued that while it is the fiduciary responsibility of oil companies to maximize profits, government policies are to blame for the current high prices.
“It’s really market conditions combined with the perverse public policies that have yielded $6 per gallon for higher prices in California,” he said. The state gas tax of $0.54 per gallon is the second-highest in the country. Zycher noted also that California has a high gasoline tax that drives prices up further. “Why weren’t they doing that 10 years ago, 20 years ago, five years ago?” “The idea that the refineries or the oil companies are profiteering off of market conditions in California, I think is not an argument to be taken seriously,” he continued. “Depending on demand and supply conditions, the good becomes more scarce, market prices rise. “The concept of price gouging is kind of silly,” Benjamin Zycher, an economist and senior fellow at the American Enterprise Institute, told FOX Business in an interview. GAVIN NEWSOM ANNOUNCES COVID STATE OF EMERGENCY WILL END IN FEBRUARY 2023 Gasoline prices in California have also declined over the past two weeks after surging in response to multiple unexpected refinery outages.ĬALIFORNIA GOV. In addition, regulations make it hard for companies to build new refineries, increase refinery capacity or boost oil production in the state. High gasoline prices are seen at a station in San Rafael, California.įor example, the state requires refiners to produce a higher-grade gasoline, which is generally costlier for consumers, during the summer months to protect air quality. Kreutzer and other experts said energy policies passed in California have exacerbated price increases in recent years. When you have these rules and regulations that prevent markets from responding as robustly as they could, then prices are going to go up.”ĬALIFORNIA’S GRID LEANING HEAVILY ON NATURAL GAS TO SURVIVE ENERGY CRISIS, DESPITE GREEN PUSH “The big problem is we have policies in place, especially in California, that make it difficult to expand supply. “You’d have to explain why ripping people off 50% more in California than the rest of the world and why they only choose to do it now,” Kreutzer said. You have to say, ‘Well, what’s California doing different today?’ They have a bunch of idiotic policies.” “It seems like they’re always gouging in California. “Some people may fall for it, but I think people are getting tired of this story,” David Kreutzer, the senior economist at the Institute for Energy Research, told FOX Business. While Newsom and other Democratic lawmakers have repeatedly blamed oil companies for profiteering, experts said the argument is a red herring. Gavin Newsom speaks during a bill-signing ceremony on Feb.
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