| Blog Post

Climate, equity, and gas prices in California

Gas pump. Photo by Canva.

Gas prices have been surging over the past two months across California, with average prices of about $1.20 more per gallon than the rest of the country. About $0.35 of that cannot be explained by taxes or other fees — but it could be explained by market manipulation. Just five corporations control over 90 percent of the gas market in the state. 

High gas prices mean record profits for oil executives, who turn around and use that money to subvert our democracy for their gain. Since 2020, oil corporations and their trade groups have spent more than $36.3 million in California alone lobbying state regulators and elected officials to delay climate action. 

For example, in February, the oil industry backed a referendum challenging SB 1137, a law passed last year to prohibit new oil drilling within 3,200 feet of sensitive sites like homes, schools, and hospitals. The referendum will go before voters on the 2024 ballot, delaying the implementation of these vital public health protections by at least another year. Last year, there were widespread reports of petitioners lying to voters to collect the signatures needed to qualify the referendum for the ballot. Filings show oil companies funneled more than $20 million into a committee called Stop the Energy Shutdown to block SB 1137 from going into effect. 

Despite pressure from oil lobbyists, Governor Newsom recently vetoed SB 842, a last-minute push by oil lobbyists to undermine California’s price-gouging penalty. The penalty on oil companies’ excess profits will deter excessive price increases and keep money in Californians’ pockets. SB 842 would have made it more difficult to assess and control gas price spikes in California. Newsom’s veto will ensure that Californians aren’t forced to pay exorbitantly high prices at the pump.

Corporate utilities are also spending big to influence California energy policy. In the first half of 2023, Sempra — which owns Southern California Gas Company and San Diego Gas and Electric — contributed more than $250,000 to electoral candidates in California. Those candidates included half of all sitting California lawmakers. Despite its already-robust lobbying budget, SoCalGas has been raising rates, with some customers reporting energy bills over $1,000 per month. The utility wants to raise them even further in 2024. 

High gas prices are the hardest to bear for lower-income communities, which are also more burdened by fossil fuel pollution and climate disasters. Many working-class Californians live far from where they work due to the high cost of living, making California commutes among the longest in the nation. And most apartment dwellers still don’t have reliable access to electric vehicle charging, delaying the transition to electric cars for millions of Californians. Without protections for millions of working-class people, high gas prices will stretch already-tight household budgets to the brink.

California leaders must prevent polluter profits from tainting our democracy. They must also design policies that benefit those who are least able to bear the burden of higher fuel prices, both on the road and at home. While the climate crisis continues its off-the-charts extremes and much more climate action is needed, we are grateful to Governor Newsom for signing into law SB 253, SB 261, and AB 1167

This blog first appeared in The Climate Center’s bi-weekly newsletter. To keep up with the latest climate news and ways to take action for a climate-safe future, subscribe today!