California governor signs oil cap bill amid ongoing concerns over its impacts on Arizona gas prices

PHOENIX – California Governor Gavin Newsom has approved a bill that aims to lower the cost at the pump for California residents, but the same bill could have negative impacts on Arizonans.

This new California bill will oversee refinery maintenance and regulate the amount of gas they are required to maintain, but these are the same refineries that Arizona’s gas supply heavily relies on.

“When global crude prices had stabilized or declined, we saw a spike increase of $2.61. That absolutely concerns the people in Nevada and Arizona,” said Gov. Newsom.

In a September letter to Gov. Newsom, Arizona Governor Katie Hobbs and Nevada Governor Joe Lombardo expressed their fears that the bill would create shortages and raise the cost of gas in the two states.

“They expressed only concerns, and understandably so because the impacts on those gas price spikes in California, impact their prices directly,” said Gov. Newsom.

Govs. Hobbs and Lombardo asked Gov. Newsom to delay the bill, hoping to work together.

According to a recent California Energy Commission report, the bill may “artificially create shortages in downstream markets,” Arizona being one of them.

“What I can say to them is now we have the tools, and we have a process where the [California Energy Commission] will deeply analyze all the considerations and concerns, do a cost-benefit analysis, and provide a tool that has not existed in the past to address those spikes,” said Gov. Newsom.

Gov. Newsom says he expects the impact to be felt by Californians by next summer. It’s unclear when this decision could impact Arizonans.

Meanwhile, we have reached out to Gov. Hobbs’ office on the issue, but they have yet to respond.