California Delays Oil Profit Cap Amid Rising Gas Prices

California, August 31, 2025

News Summary

California regulators have postponed the implementation of a profit cap on oil companies until 2030 as gas prices soar to record highs. With the average price for regular unleaded gas hitting $4.59 per gallon, state officials face pressure to address the situation, especially following the planned closure of key refineries that contribute 18% of refining capacity. Critics argue this delay benefits the fossil fuel industry amid growing costs for consumers. As lawmakers discuss potential solutions, gas prices are projected to fluctuate in the coming months.

California regulators have delayed the implementation of a profit cap on oil companies amid rising gas prices, a decision that many see as beneficial for the fossil fuel industry. The California Energy Commission announced that plans to impose a profit penalty on oil companies will be postponed until 2030. This decision comes as the state’s gas prices have reached the highest in the nation due to a combination of taxes and stringent environmental regulations.

Gas prices in California have recently experienced a notable uptick, with regular unleaded gas averaging $4.59 per gallon. This price significantly exceeds the national average of $3.20. In just one week, average gas prices in the state have climbed nearly 8 cents, while prices have increased 12 cents compared to the previous month. Some areas in Southern California have experienced even steeper increases, with gas prices spiking by 10 cents or more shortly before the Labor Day weekend, partially due to refinery maintenance that affected wholesale prices.

The energy commission’s decision to postpone the profit penalty follows the announcement that two key oil refineries, which together account for approximately 18% of California’s refining capacity, plan to close in the upcoming months. Although the commission retains the authority to implement a profit cap, it is yet to define what would be considered excessive profits.

California Governor Gavin Newsom had previously claimed the state had “finally beat big oil.” However, this recent delay in imposing profit penalties raises concerns that the oil industry could continue to benefit as prices fluctuate. Critics, including advocacy groups, view this delay as a significant concession to oil companies and predict that California may face further price spikes in the future.

The Western States Petroleum Association supports the commission’s decision, advocating for a 20-year postponement of the profit penalty. They argue that California’s high gas prices result from regulatory costs and supply chain issues, rather than refinery profits. Despite the recent price increases, California’s average gas price is slightly lower—about 4 cents—than it was at this time last year.

In the Los Angeles-Long Beach area, the average gas price is currently $4.61, reflecting a 14-cent rise from last month. Experts believe that extending oil drilling operations in California might help stabilize prices; however, they acknowledge it may not be a comprehensive solution to the underlying issues affecting gas prices.

Lawmakers are discussing various proposals aimed at lowering gas prices, including adjustments to California’s unique fuel blend. There appears to be a consensus among lawmakers and industry experts calling for a reassessment of measures that enable the Energy Commission to regulate refiners’ profit margins. In light of refinery closures, the commission has also delayed votes on essential regulations to set caps on profit margins and various efforts to enhance fuel reserves.

As summer transitions to autumn, gas prices are expected to experience fluctuations. Analysts predict that prices may decrease as fall and winter approach. However, Southern California is still bracing for heightened travel during the Labor Day weekend, despite the current rise in gas prices. Nationwide, gas prices for Labor Day are projected to average around $3.15, marking the lowest point since 2020.

FAQ

Key Features

• Current Price of Gas: $4.59 per gallon
• National Average: $3.20 per gallon
• Proposed Delay: Profit penalty postponed to 2030
• Refinery Closures: Two refineries closing soon, affecting 18% of capacity
• Recent Price Increase: 8 cents in one week, 12 cents from last month
• Average in LA-LB Area: $4.61, up 14 cents from last month

Deeper Dive: News & Info About This Topic

• Los Angeles Times: SoCal Gas Prices Surge Ahead of Labor Day Weekend
• Politico: Your Guide to Newsom’s Gas Price Gambits
• AOL: California Gas Prices Jump
• KTLA: Gas Prices Up as Holiday Rush Kicks Off
• Recordnet: Weekly Gas Prices
• Wikipedia: Gasoline
• Google Search: California gas prices
• Google Scholar: California gas prices
• Encyclopedia Britannica: Gasoline
• Google News: California gas prices

Author: STAFF HERE LOS ANGELES WRITER

LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the LA Auto Show, Hollywood Film Awards, and the Los Angeles Marathon. Our coverage extends to key organizations like the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology that power the local economy such as Warner Bros. and SpaceX. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HEREHuntingtonBeach.com, and HERESantaAna.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.