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California Governor Gavin Newsom has signed a new law increasing state regulators’ control over the oil industry.

What’s the deal: California Governor Gavin Newsom signed ABx2-1 into law, a measure aimed at regulating oil refinery fuel storage to prevent future gasoline shortages and price spikes. The law grants the California Energy Commission authority to oversee and set minimum fuel storage levels for refineries, ensuring they maintain sufficient inventories to avoid supply disruptions during maintenance or other outages. It also requires refiners to have resupply plans in place before shutting down for maintenance and allows the state to adjust these inventory levels as needed.

Governor reacts: In a statement, Governor Gavin Newsom said, “Price spikes have cost Californians billions of dollars over the years, and we’re not waiting around for the industry to do the right thing — we’re taking action to prevent these price spikes and save consumers money at the pump. Now, the state has the tools to make sure they backfill supplies and plan ahead for maintenance so there aren’t shortages that drive up prices. I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians.”

What people against the law are saying: Despite the state lawmakers arguing that the new law will protect consumers from gas price spikes, opponents say it could lead to unintended consequences such as higher gas prices and risks to worker safety. Oil companies, including Chevron, argue that the legislation misinterprets market forces, warning that stricter inventory regulations could create artificial shortages and drive up fuel costs. Labor unions have also expressed concerns that giving the California Energy Commission, an unelected body, more oversight on refinery maintenance could compromise safety by sidelining workers’ operational expertise.

What people for the law are saying: Supporters of the new law argue that it will protect Californians from unpredictable gas price spikes. Lawmakers also claim that the legislation will hold refineries accountable, reducing their ability to “manipulate” fuel supplies for profit at consumers’ expense.