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SB X1-2 and AB X2-1 Implementation

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Senate Bill X1-2

Senate Bill X1-2 (SB X1-2), the California Gas Price Gouging and Transparency Law, was signed by Governor Gavin Newsom in March 2023.

The law was passed during a special legislative session convened to protect Californians from price spikes at the pump, after consumers experienced extreme gasoline prices in fall 2022. The law introduced new data reporting and oversight measures to provide state agencies with better information to understand the complexities of the petroleum industry, support long-term planning efforts, increase industry accountability, and protect consumers.

Specifically, the law states that:

  • The petroleum industry—oil producers, refiners, marketers, transporters, and storers—will submit additional information and detailed data to the California Energy Commission (CEC), enabling the CEC to better assess and predict price trends and protect consumers from price spikes.
  • Refineries must report to the CEC the timing and expected impact of refinery maintenance outages.
  • Refineries must give the CEC one year notice of any plans to shut down or reconfigure their operations.
  • The CEC shall produce a transportation fuels assessment every three years reporting on the state of the transportation fuels market, including policy options to improve market stability, reliability, and affordability.
  • The CEC shall assess the effects of implementing a maximum gross gasoline refining margin and penalty to determine if such a profit margin and penalty system would help control price spikes or cause unintended impacts to supply or prices.
  • The CEC and California Air Resources Board shall develop a transportation fuels transition plan to plan and monitor the state’s transition away from petroleum fuels.
  • The Division of Petroleum Market Oversight (DPMO) will be created as a new and independent division within the CEC responsible for oversight, investigation, economic analysis, and policy recommendations related to the transportation fuels market.
  • The Independent Consumer Fuels Advisory Committee will be created as an independent committee to advise the CEC and DPMO. Members are appointed by the Governor, the Speaker of the Assembly, and the Senate Committee on Rules.

Assembly Bill X2-1

Assembly Bill (AB) X2-1, the Reducing Gasoline Price Risks Law, signed in October 2024, further enhances the provisions of Senate Bill X1-2. 

Specifically, the law states that:

  • The California Energy Commission (CEC) will assess and may develop a framework for resupply requirements that would require oil refiners to plan for resupply during planned maintenance outages to avoid supply shortages that create higher gasoline prices for consumers.
  • The CEC will assess and may develop a framework for minimum inventory requirements that would require oil refiners to maintain a minimum inventory of fuel to support market liquidity and help avoid price spikes.
  • The CEC’s transportation fuels assessment will be expanded to evaluate California’s future petroleum product and crude oil import needs, and identify steps needed to ensure that marine infrastructure and port facilities can accommodate those needs.

Read updates on SB X1-2 and AB X2-1 implementation below.