California legislators who say oil companies used the Iran war as cover to overcharge motorists are throwing their support behind a proposal that would let the state respond through its emergency price-gouging enforcement powers.
The bill, known as the Wartime Price Gouging Prevention Act (SB 493), is co-authored by Sen. Josh Becker (D-Menlo Park) and Sen. Ben Allen (D-Santa Monica). It would expand California’s existing price-gouging law by adding “war” to the list of emergencies already covered, including wildfires, floods, earthquakes, riots, storms, droughts and pandemics.
Becker told The California Post the legislation is intended to close a gap in current law that has limited the state’s ability to pursue suspected fuel-market manipulation connected to an overseas conflict. He said California motorists have paid billions of dollars more for gasoline and diesel, amounting to about $250 in added costs per household.
“Right now it’s just the Attorney General [Rob Bonta] can’t prosecute, he can’t go after that,” Becker said in a phone interview.
“He just can’t do it because of the way the law is structured.”
The state-level effort comes as President Trump has launched his own attack on major oil companies, accusing them of “gouging” consumers by not cutting gasoline prices quickly enough after crude prices eased from wartime peaks.
“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil,” Trump wrote on Truth Social. “Those prices are dropping like a rock! In other words, customers are being ‘gouged.’
“I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!”
The American Petroleum Institute pushed back, saying fuel prices “don’t move in lockstep with crude oil” and that the conflict was still affecting supply, refining and inventories, according to the BBC.
Under current California law, businesses generally cannot raise prices by more than 10% for essential goods and services after a declared emergency. The law covers gasoline, diesel, food, emergency supplies, medical supplies, building materials, hotel rooms, rental housing, transportation, freight and storage services.
The new bill would allow Gov. Gavin Newsom to declare a war-related emergency, giving the attorney general authority to pursue suspected price gouging if there is evidence that companies used the conflict to justify excessive markups.
“The governor could declare a state of emergency, and then the attorney general could go after price gougers,” Becker said. “That was the problem we’re looking to fix.”
Becker said the bill was sparked by evidence presented during a Senate Energy, Utilities and Communications Committee oversight hearing after the June election. Allen chairs the committee, and Becker serves as a member.
State officials discussed ongoing petroleum market oversight work but made clear that current law limits what can be pursued when suspected price gouging is tied to war, Becker said. California created the Division of Petroleum Market Oversight to monitor the fuel market, though officials generally do not comment on active investigations.
Becker said one red flag is the gap between branded gasoline, such as fuel sold by major oil companies such as Chevron, and unbranded gasoline, often sold by independent operators.
“Across the country, it’s only five cents a different spread, but in California, since the start of the war, it’s been 31 cents,” Becker said. “So that gave us good evidence that there’s something going on here.”
Supporters of the bill say gas and diesel costs have increased by $62 billion nationally since the war began, including about $3 billion in added costs for California residents.
Becker said the impact is not theoretical.
“There’s just lots of things you’re adding up that show real impacts on Californians, real dollars out of Californian’s pockets,” Becker said.
Last year, Becker said, California gas prices were $1.50 higher than the national average for only two weeks. Since the war began, he said, the state has exceeded that mark in roughly half the weeks reviewed.
Oil companies have long argued California’s high fuel costs are driven by taxes, fees, environmental regulations and the state’s isolated fuel market. Republicans have also blamed the state’s gas taxes for adding to the burden on drivers.
Becker said gas taxes are a separate fight.
“Those gas tax revenues do pay for all the road repairs and critical infrastructure in my district and across the state,” Becker said.
The legislation does not create a new price-gouging, but instead it inserts war into the list of emergencies already covered by state law. The bill defines war to include a formal congressional declaration, active US military operations against a foreign power or US participation in United Nations armed actions to maintain or restore peace.
The bill passed through the Assembly Public Safety Committee on Tuesday after Becker accepted amendments intended to clarify its scope. It next heads to the Assembly Appropriations Committee before a possible vote on the Assembly floor.
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