California lawmakers are advancing legislation that would expand the state's price-gouging laws to include conflicts abroad, aiming to give authorities the power to investigate and prosecute oil companies accused of exploiting wartime conditions to raise gasoline and diesel prices.
The proposed Wartime Price Gouging Prevention Act, SB 493, introduced by Sen. Josh Becker and co-authored by Sen. Ben Allen, seeks to add "war" to the list of declared emergencies under which the state can penalize sharp price increases. Current California law permits price-gouging crackdowns during emergencies like wildfires, floods, earthquakes, riots, storms, droughts, and pandemics, generally limiting price hikes to 10% for essential goods and services.
"Right now it’s just the Attorney General [Rob Bonta] can’t prosecute, he can’t go after that," Becker stated. "He just can’t do it because of the way the law is structured." He believes the measure will close a loophole preventing the state from fully addressing suspected fuel market manipulation tied to overseas conflicts.
California drivers have reportedly paid billions more for gasoline and diesel since the start of the war, with an estimated $250 increase in costs per household. Becker cited a significant disparity between branded and unbranded gasoline prices in California since the conflict began, a spread that has widened to 31 cents compared to a national average of five cents. This gap, he suggested, provides evidence of market manipulation.
The push for the bill comes as former President Trump has also accused major oil companies of "gouging" consumers by not lowering pump prices in line with decreased crude oil costs. Trump announced he had instructed the Department of Justice to investigate the matter.
The American Petroleum Institute, however, has pushed back against these accusations. The industry group stated that fuel prices do not directly correlate with crude oil costs and that ongoing conflicts continue to affect supply, refining processes, and inventory levels.
Under SB 493, the governor could declare a state of emergency related to a war, granting the attorney general the authority to pursue price gouging if evidence suggests companies used the conflict to justify excessive markups. The bill defines war to encompass a formal congressional declaration, active U.S. military operations against a foreign power, or U.S. participation in United Nations armed actions to restore peace.
The legislation passed the Assembly Public Safety Committee and is now headed to the Assembly Appropriations Committee. Becker emphasized that the bill does not introduce new price-gouging regulations but rather incorporates war into the existing framework of emergency consumer protections. He also clarified that gas taxes, which contribute to road repairs and infrastructure, are a separate issue from price gouging.
Supporters estimate that gas and diesel costs have risen by $62 billion nationally since the war began, with California residents bearing approximately $3 billion of that increase. Becker noted that the impact is tangible, with Californians feeling the financial strain directly.