Driving through Arizona could end up costing you more than just time in the near future. With gas prices already soaring at 40 cents above the national average, a new proposal in California might send those numbers even higher. The Golden State, which fuels a significant portion of Arizona through its refineries, is mulling over a legislative move that would cap profits for its oil companies. Concerned over the ripple effects, Arizona State Rep. Justin Wilmeth criticized the plan, as reported by 12 News.
Wilmeth, airing his anxieties at a state senate oversight hearing, pointed out the fundamental economic principles at play. "If they were to lower production or supply, the prices would go up, and there's not much we could do about that," he stated. This concern is echoed in the industry with Catherine Reheis-Boyd, president of the Western States Petroleum Association, highlighting the negative incentives this policy could create. As 12 News reported, she warned against penalties on refiners' revenues that might lead to a diminished gasoline supply.
On the other side of the issue, California's intentions to prevent price gouging in the face of persistently high prices was a talking point at a recent California Energy Commission meeting. Drivers like Dion Perry are already feeling the heat, with some spending up to $140 on gas every other day. The CEC's role in implementing the Gas Price Gouging and Transparency Law came under scrutiny, seeking oil industry accountability. "We have the cleanest fuel in the country and that costs a little bit more to refine, so we want to hear from both perspectives on what those challenges are and how we control those prices," California State Sen. Steven Bradford said in the ABC 10 coverage.
Reheis-Boyd remained steadfast in her critique, stressing the detriment of reducing supply and consequent price escalation on consumers. Seeing the number of refineries drop significantly in her state, she insinuated the direct impact on what drivers pay at the pump. "It means they're not making any fossil fuels, they're not making any gasoline, they're making diesel that is based on renewables... so that shortens the supply of gasoline to California," she explained to ABC 10. Wilmeth, flying to Sacramento to voice his concern, feared closures of refineries that would not only affect Arizona but also neighboring states.
Yet, Bradford expressed a degree of appreciation for the interstate dialogue. He acknowledged the broad impact California's decisions could have, underlining the interconnected nature of state economies. He told ABC 10, "We need to understand that what we do will drive cost up also in Arizona, as you heard from that state rep, so we have to look at all sides." The final decision on the proposed legislation in California remains pending, with implications sure to reverberate across the southwest.
