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Newsom Orders Early Release of 'Winter Blend' Gas
Gas prices are seen at a Chevron gas station in Los Angeles on Sept. 28, 2023.
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Topline:
Gov. Gavin Newsom issued a directive Thursday telling oil refiners to switch to the cheaper “winter blend” a month early in an effort to lower prices at the pump, and bring back competitive pricing.
Why it matters: According to data from AAA, California’s average cost for a gallon of regular gas was around $6.08 as of Friday. The national average is about half of that at $3.80 a gallon. Newsom has been vocal about what he suspects is “price gouging” from oil producers who find themselves able to charge more. The switch from a summer to a winter blend should ease the conditions a bit. California expects gas prices to drop by as much as 25 cents per gallon, but there’s no guarantee.
Why now: A report released by the Division of Petroleum Market Oversight last week says “an unusual transaction on the gasoline spot market, refinery maintenance that refiners did not adequately prepare for, and global crude oil prices” are keeping gas prices high over the past few months.
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What's next: California Air Resources Board approved Newsom's directive to switch the state to a winter blend fuel. California typically starts production for this fuel around Oct. 31.
Tai Milder, who heads Newsom’s new petroleum oversight division, says “implementation can take place almost immediately…that should mean…we'll see an improvement with prices and relief for families in the coming days and weeks”.
Milder added that the Division of Petroleum Market Oversight will analyze market behavior data after the switch to the winter blend. The information will determine whether to impose penalties or start cracking down on refinery schedules.
In a news conference Thursday he told reporters “we have to bring in experts. We’re going to try and collaborate with the industry and look for a solution that we think makes sense and brings rational pricing back to the market.”
Go deeper: Gas Prices Reach $6 Per Gallon
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