Editorial: High gasoline prices and government central planners

The Editorial Board, Las Vegas Review-Journal on Apr 7, 2025

Published in Op Eds

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Bad policies have consequences. Nevada Democrats who look to California for inspiration would do well to keep that simple truism in mind.

Two years ago, Golden State Gov. Gavin Newsom made a show of signing legislation to crack down on Big Oil for “price gouging.” California consistently has the highest gasoline prices in the country and has long been prone to spikes that can push pump prices beyond $6 a gallon.

“Open your books and prove that you’re not price gouging,” said then-state Sen. Nancy Skinner, a Democrat (surprise!) after Newsom endorsed the bill she sponsored that gave regulators the power to cap oil industry profits. “Otherwise, you — Big Oil — will pay the price, not consumers.”

Since the legislation passed, however, the state “has been unable to prove” that oil companies were intentionally raising prices to boost their profits, the Sacramento Bee reported last month. “The state hasn’t leveled any penalties on oil refining companies … and has even stopped posting the data it required.”

It turns out, not surprisingly, that Newsom and the meddlers in the California Legislature have been searching in the wrong place in their quest to find the culprits for the state’s high gasoline prices. A recent study out of the USC Marshall School of Business places the blame on Skinner and her fellow central planners in the state Capitol.

“It is uniformly acknowledged that California has the most stringent regulatory … environment, for oil and gas companies in the world,” the study concludes. “Regulatory oversight, irrespective of one’s perspective, is layered into and accumulates throughout the supply chain, ultimately adding to the cost burdens of compliance for oil and gas industry operators, which, in turn, contribute to higher consumer prices at the pump.”

The study’s author, Michael Mische, an associate professor of the practice of management and organization at USC, also noted that California’s oil production has steadily declined in recent decades. Once the top oil-producing state, it now ranks seventh and will continue to lose refineries. This isn’t an accident. It’s a direct result of dozens of policy decisions made by the progressives who run the state.

“These are costs only associated with California,” a petroleum analyst told KTLA in Los Angeles. “California has done a terrific job chasing (refineries) out of the state and suddenly wondering why they don’t have enough gasoline or why prices skyrocket.”

In addition, California’s gasoline tax is the most punishing in the nation, further boosting prices.

Newsom is right about one thing: There’s greed involved when it comes to his state’s high gasoline prices. But it’s not coming from the executive suites of the major oil producers. Instead, it permeates the legislative halls of Sacramento.

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