California, August 31, 2025
News Summary
California energy regulators have postponed a profit cap on oil companies until 2030 due to rising gas prices, currently the highest in the nation. This decision comes as two major oil refineries prepare to shut down, contributing to increased prices for consumers. California’s average gas price has surged to $4.59 per gallon, significantly higher than the national average. Critics worry the delay primarily benefits the fossil fuel industry and may result in future price spikes, as lawmakers explore various regulatory measures amid refinery maintenance and closures.
California energy regulators have decided to postpone a profit cap on oil companies until 2030, amidst surging gas prices that currently rank the highest in the nation. This move has sparked concerns about its implications for consumers and the fossil fuel industry.
The California Energy Commission’s delay comes on the heels of announcements that two major oil refineries, which collectively represent about 18% of the state’s refining capacity, are set to shut down within the coming months. As a direct result, gas prices in the state have experienced a rise, with regular unleaded gas currently averaging $4.59 per gallon, considerably higher than the national average of $3.20.
In California, gas prices have surged by nearly 8 cents from the previous week and 12 cents from last month. Furthermore, specific areas in Southern California experienced gas price increase of 10 cents or more just before the Labor Day weekend, primarily due to refinery maintenance impacting wholesale prices. As a result, the average price in the Los Angeles-Long Beach area is currently pegged at $4.61, marking a 14-cent increase from the previous month.
The commission’s decision to delay the penalty on oil companies is viewed by some critics as beneficial to the fossil fuel industry. They argue this could lead to further price spikes in the future. The Western States Petroleum Association, which advocates for a 20-year postponement of the profit penalty, claims that California’s high gas prices are largely attributed to regulatory costs and supply constraints, rather than profits made by refineries.
California Governor Gavin Newsom previously claimed that the state had “finally beat big oil” two years ago, indicating a step forward in the regulatory landscape. However, the commission still retains the option to implement the penalty, although it has not yet defined what constitutes excessive profits for oil companies.
Despite recent increases, California’s average gas price remains approximately 4 cents lower than the same period last year. Furthermore, experts suggest that extending oil drilling in California could help stabilize prices, although it may not be a comprehensive solution to the underlying issues affecting the market.
Lawmakers are exploring various proposals, including adjustments to California’s unique fuel blend, to potentially ease rising gas prices. There is a consensus among them and industry experts that recent measures giving the Energy Commission authority to regulate refiners’ profit margins should be abandoned. As the commission continues to delay voting on critical regulations related to profit caps and fuel reserves amidst refinery closures, uncertainty looms over future gas prices.
Gas prices are expected to fluctuate as California enters the fall and winter months, with analysts projecting a potential decrease. However, Southern California is anticipating increased travel during the Labor Day weekend, even as consumers face rising gas prices. In contrast, nationwide gas prices are expected to average around $3.15 for Labor Day, marking the lowest levels since 2020.
FAQ Section
What is the current average gas price in California?
The current average gas price in California is $4.59 per gallon for regular unleaded gas.
Why did the California Energy Commission delay the profit cap on oil companies?
The commission postponed the profit cap until 2030 to assess its implications amidst rising gas prices and refinery closures.
How has recent refinery maintenance affected gas prices?
Refinery maintenance has led to wholesale price increases, resulting in gas price hikes of 10 cents or more in some Southern California areas.
What has been the trend in gas prices compared to last year?
Despite recent increases, California’s average gas price is about 4 cents lower than the same time last year.
Is there a consensus among lawmakers regarding the regulation of oil companies?
Yes, there is a consensus among lawmakers and industry experts that the state should reconsider recent measures that grant the Energy Commission excessive authority over refiner profit margins.
Key Features of the Recent California Energy Commission Decision
| Feature | Detail |
|---|---|
| Current Gas Prices | $4.59 per gallon |
| Postponed Profit Cap Year | 2030 |
| Refinery Closures Impact | Two refineries account for 18% of state’s capacity set to close |
| Comparison to National Average | California’s gas prices exceed national average of $3.20 |
| Increase in Last Month | 12 cents increase |
| Potential Future Action | Commission may still impose a penalty |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: SoCal Gas Prices Surge Ahead of Labor Day Weekend
- Politico: Your Guide to Newsom’s Gas Price Gambits
- AOL: California Gas Prices Jump
- The Center Square: California Gas Prices
- AAA: Gas Prices Go Down – But How Low Will They Go?
- Wikipedia: Gasoline
- Google Search: California Gas Prices
- Google Scholar: California Gas Prices
- Encyclopedia Britannica: Gasoline
- Google News: California Gas Prices
Author: STAFF HERE HUNTINGTON BEACH
The Huntington Beach Staff Writer represents the experienced team at HEREHuntingtonBeach.com, your go-to source for actionable local news and information in Huntington Beach, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Huntington Beach Surf City USA Marathon, the U.S. Open of Surfing, Fourth of July celebrations at the Huntington Beach Pier, and community festivals at Huntington Beach Central Park. Our coverage extends to key organizations like the Huntington Beach Chamber of Commerce and Visit Huntington Beach, plus leading businesses in retail, hospitality, and outdoor recreation that drive the local economy. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
