California's Unused Gas Price Tools Face Scrutiny Amid Soaring Costs

The state passed a law in 2023 to curb price spikes, but regulators have delayed implementing the rules as refineries close and global conflicts drive up prices.

Mar. 13, 2026 at 2:50pm

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Three years ago, California passed a landmark law giving regulators the power to cap refinery profits and penalize oil companies for price gouging. But the law has never been used, and last year the California Energy Commission voted to delay the rules for five years. Now, with gas prices topping $5.30 a gallon statewide, the decision is under new scrutiny as the U.S. war with Iran sends global oil prices soaring. Proponents say this is precisely the moment the 2023 law was designed for, but those who backed the delay argue it was a necessary concession to avoid driving refiners out of the state entirely.

Why it matters

California has a structural problem with fewer refineries, a captive market, and no easy outside supply options. When prices rise nationally, they can rise even more in the state. The unused gas price tools were meant to protect consumers, but the delay has left California vulnerable to global oil shocks and price spikes.

The details

The 2023 law gave regulators the power to cap refinery profits and penalize oil companies for price gouging. But the California Energy Commission voted last year to delay the rules for five years, citing concerns about driving refiners out of the state. Now, with gas prices spiking due to the U.S. war with Iran, proponents say this is the moment the law was designed for, while those who backed the delay argue it was a necessary concession.

  • In 2023, the California legislature passed a law giving regulators new powers to curb gas price spikes.
  • In August 2025, the California Energy Commission voted to delay implementing the rules from the 2023 law for five years.
  • In March 2026, gas prices in California topped $5.30 per gallon statewide amid the U.S. war with Iran.

The players

Gavin Newsom

The governor of California who signed the 2023 law giving regulators new powers to curb gas price spikes.

Nancy Skinner

The former state senator who authored the 2023 law that has never been used.

Siva Gunda

The vice chair of the California Energy Commission who recommended delaying the implementation of the profit-cap rules.

Jamie Court

The president of Consumer Watchdog, a group that says the 2023 law should be used to prevent price gouging.

Severin Borenstein

A UC Berkeley energy economist who warned that capping refinery profits during shortages could backfire.

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What they’re saying

“These are the moments we need them, because when the price of a commodity goes through the roof — be it crude oil or refined gasoline — that's when companies make outrageous profits.”

— Jamie Court, President, Consumer Watchdog (lostcoastoutpost.com)

“The last thing we need is to start trying to regulate refinery margins. As much as people don't like high gasoline prices, they really, really hate gas lines.”

— Severin Borenstein, Energy Economist, UC Berkeley (lostcoastoutpost.com)

What’s next

The California Energy Commission has left the door open to rescinding the five-year delay on the profit-cap rules if they change their minds, which could happen if gas prices continue to spike.

The takeaway

California's unused gas price tools highlight the state's difficult position as it tries to phase out fossil fuels while maintaining adequate fuel supply. The delay in implementing the 2023 law has left the state vulnerable to global oil shocks, raising questions about whether regulators will act to protect consumers from potential price gouging.