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California moved one step closer Thursday to enacting the first of its kind legislation that would penalize oil companies for “price gouging,” after the measure was handily approved by the state Senate in a Special Session called to expedite the bill.
The measure is expected to go to the State Assembly next week and receive Gov. Gavin Newsom’s signature shortly thereafter.
The bill would allow the California Energy Commission to create a new watchdog agency to monitor the oil industry and request data and records that companies have not previously provided.
It would also authorize the state to set a maximum gasoline refining gross margin and then set a penalty for any California-based refiner who exceeds the margin.
The companies most affected by the legislation would likely include refiners such as Marathon Petroleum (NYSE: MPC), Valero Energy (VLO), Phillips 66 (PSX) and PBF Energy (PBF), which has criticized Newsom for “politicizing” California’s high gasoline prices.