On Thursday, Gov. Gavin Newsom announced a new proposal that would require oil refineries to keep a minimum supply of fuel reserves in hopes of avoiding future supply shortages and price hikes for consumers.

The governor’s plan would direct the California Energy Commission to require petroleum refiners to follow the new guidelines. The governor hopes the proposal will help keep supply and prices stable even when refineries undergo maintenance.

Penalties would be imposed on refiners who fail to follow the new guidelines.

According to Newsom, scheduled maintenance periods at oil refineries resulted in low supply and high prices for consumers. If the proposal had been in effect in 2023, Californians would’ve saved upwards of $650 million in gas costs.

“Price spikes at the pump are profit spikes for Big Oil. Refiners should be required to plan ahead and backfill supplies to keep prices stable instead of playing games to earn even more profits. By making refiners act responsibly and maintain a gas reserve, Californians would save money at the pump every year,” Newsom said in a statement.

Newsom also pointed out that Australia, Japan and the European Union have passed similar regulations.

However, not everyone is on board with the proposed plan. Representatives of California’s oil industry said in a statement that Newsom’s claims that oil refineries intentionally planned maintenance during busy driving seasons are “purposely misleading” and show an utter lack of understanding about their industry.

“To impose new operational mandates on energy producers based on such falsehoods is regulatory malpractice, and ignores the logistical challenges and costs associated with such a plan.  When this administration is ready to have a serious discussion about the facts and the policies this state has imposed that affect consumer costs, we will be there,” Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association, said in a statement.

California lawmakers would have to approve the proposal before it can be officially implemented. The current legislative session ends on Aug. 31.

For years, Newsom has been at odds with oil companies. He has often alluded to the fact that oil companies are the reason gas prices are high in California.