CALIFORNIA STATE – California drivers are getting crushed at the pump, and the state is taking drastic measures to try and change that.
With regular gasoline hovering around $6.14 to $6.24 a gallon in late September, versus a national average of $4.44, and diesel as high as $8.44, Sacramento is pulling levers it has never pulled before.
The most dramatic move came on September 20, when Gov. Gavin Newsom signed Senate Bill 795 to allow sales of E15, gasoline with 15% ethanol. California was the only state in the country where E15 couldn’t be sold. Reuters reports the bill removed the final equipment-certification hurdle more than a year after lawmakers unanimously voted to allow it.
What difference will that make? Ethanol is wholesaling for about $2.30 a gallon, far cheaper than gasoline. The New York Post pegs the potential savings at 20 cents per gallon, which would amount to billions statewide by mixing it in.. A UC Berkeley study cited by producer Aemetis put the figure at $2.7 billion a year, with E15 adding roughly 650 million gallons of annual ethanol demand.
This week brought a second emergency lever. On Monday, Newsom suspended California’s seasonal summer-blend gasoline requirement for the rest of the season, directing regulators to let cheaper winter-blend fuel be made, imported and sold immediately.
The administration is also dusting off a controversial 2024 law from a special legislative session — ABx2-1 — that lets the state require refiners to hold minimum gasoline inventories and plan for resupply during maintenance outages.
Supporters say a single refinery outage can wipe out up to 45% of Northern California’s capacity, and that price spikes cost Californians more than $2 billion last year. Newsom also ordered a new public spot-market price report, arguing that a handful of opaque trades can move prices for the whole state.
Will it be enough? Critics note California’s core problem hasn’t changed: an isolated fuel market, a special smog-fighting blend few refineries can make, high taxes and fees, and shrinking in-state refining capacity as plants close.
E15 and winter-blend gas should shave cents off quickly, but the inventory law will take longer to bite — and with global crude still volatile, drivers shouldn’t expect Midwestern prices anytime soon.
For now, though, California is trying just about everything; short of cutting its gas tax.
