Two years ago, then-California Lt. Gov. Gavin Newsom backed a bill to raise the state’s base excise tax on gasoline by 12 cents per gallon. Then during his campaign last year to serve as California’s next governor, then-candidate Newsom criticized a Republican-crafted ballot measure to repeal said tax.
Now fast-forward to this Monday, when now-Gov. Newsom penned a letter to the California Energy Commission demanding it investigate why gas prices have soared as high as $4 and beyond …
“Independent analysis suggests that an unaccounted-for price differential exists in California’s gas prices and that this price differential may stem in part from inappropriate industry practices,” the governor wrote, according to the San Francisco Chronicle. “These are all important reasons for the Commission to help shed light on what’s going on in our gasoline market.”
This stunningly oblivious request garnered cutting mockery from all sides of the political aisle, including the Trump-aligned conservative side. Note for instance what President Donald Trump’s 2020 reelection campaign manager, among others, tweeted Thursday morning:
This is just funny. Hey genius, it is because you have the highest gas taxes in the US. https://t.co/LXeduJ2tgG
— Brad Parscale (@parscale) April 25, 2019
— Aja Smith for Congress (@AjaforCongress) April 24, 2019
— JohnHCox (@TheRealJohnHCox) April 24, 2019
Gavin Newsom supported a 2017 bill increasing California’s gas taxes. Then in 2018, he opposed a ballot initiative that would have repealed that same increase. Now, in 2019, he’s demanding an investigation into why the state’s gas prices are so high. ?https://t.co/xFYqZB50Pv pic.twitter.com/Rs6sa0hXTT
— PragerU (@prageru) April 25, 2019
.@GavinNewsom can’t figure out why gas prices are so high. Really?
We love a good mystery, but this one isn’t hard. Gas prices are high because Democrats keep taxing gas! They are even pursuing a new gas tax as we speak.
Detective Newsom is on the case!https://t.co/l9R44PioUs
— CAGOP (@CAGOP) April 24, 2019
— James Hirsen (@thejimjams) April 25, 2019
The folks at the libertarian magazine Reason also took note.
“California currently imposes the second-highest gas taxes in the country,” Reason associate editor Christian Britschgi wrote. “A state excise tax currently adds $.417 per gallon, a rate that will increase to $.473 come July. On top of that, the state imposes a 2.25 percent gasoline sales tax.”
“In addition, California has adopted a low-carbon fuel standard and a cap-and-trade scheme for carbon emissions which together increase the state’s gas prices by $.24 per gallon above the national average, according to a 2017 state government report.”
It’s unclear whether Newsom also supported the low-carbon fuel standard and cap-and-trade scheme.
What’s known is that he’s not alone in his stunning obliviousness. In January 19 state legislators — 17 of whom had reportedly voted in favor of the 2017 gas tax increase — submitted a letter to California Attorney General Xavier Becerra also asking for an investigation.
Just filled up gas in Arizona and it was $3.19 and then passed into California and the first gas station I seen was $4.15 yeah didn’t miss these gas prices
— chaarlesssss (@CharleyHodge) April 25, 2019
— Kriste Beck (@KristeBeck) April 25, 2019
— Lena Howland (@LenaHowland) April 17, 2019
Are these REALLY the gas prices in California? Anyone? pic.twitter.com/6SFcmjQDk2
— Jenn?⚾️? (@Jenndel524) April 17, 2019
“We, the undersigned legislators, are contacting you to ask the California Department of Justice to launch an investigation into gasoline prices in the state. The primary basis for this request is the ‘Final Report’ of the Petroleum Market Advisory Committee (PMAC), which was formed by the California Energy Commission (CEC) in December 2014 to review California?s petroleum fuel-market operations,” they wrote.
“Submitted to the CEC in September 2017, the Final Report noted that even after accounting for
California’s gasoline tax, fuel-blend and greenhouse gas reduction costs, ‘gasoline prices since
February 2015 have exhibited a continuous and significant unexplained differential compared to the rest of the country.'”
Undergirding both their letter to Becerra and Newsom’s letter to the California Energy Commission is the unsubstantiated belief that the companies that produce and sell gasoline are partaking in “inappropriate industry practices,” and that these alleged practices need to be stopped via more regulations.
The irony is that even if “inappropriate industry practices” are occurring — which, to be clear, there’s no reason to suspect — the most likely culprits would again be California Democrats.
“Government fees and red tape often have the effect of squeezing out marginal producers and retailers, giving remaining firms greater ability to raise prices,” Britschgi explained.
In other words, the very regulations that Newsom and his Democrat peers believe are the solution to any and all problems may very well be spurring the very problems they’re trying to solve.
— Conservative News (@BIZPACReview) July 23, 2018
Gasoline refineries have for their part argued that the “price differentials” being seen in California are the result of both the normal ebb of supply and demand, and California’s regulations.
“Over the past several decades, fuel costs in California have been subject to dozens of independent inquiries by government agencies, all of which concluded the dynamics of supply and demand are responsible for movements in the price of gasoline and diesel fuel,” the Western States Petroleum Association, which represents refineries, said in a statement.
“In addition, many ever-changing factors, including the higher cost of producing CARB gasoline and state programs, such as cap-and-trade and the Low Carbon Fuel Standard, impact fluctuations in energy markets.”
Concluding her post for Reason, Britschgi noted that “absent” California’s unnecessary gas increases and regulations, “the state’s gas prices would be lower.”
“Clearly, for many of California’s politicians, the benefits of state policies aimed at producing cleaner air quality, mitigating climate change, and generating more revenue for road maintenance and light rail expansions surpass the costs of higher gas prices,” she wrote.
“If that’s the case, however, Newsom and others should make that case to voters directly and explicitly instead of trying to appease motorists’ anger by pointing their fingers at industry.”
Instead they should point their fingers at themselves.
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