Report to Mayor and City Council
Tuesday, January 03, 2023
Consent
SUBJECT:
Title
CONSIDER TAKING A POSITION OF SUPPORT AND SENDING A CORRESPONDING LETTER TO THE OFFICE OF GOVERNOR GAVIN NEWSOM REGARDING THE ENACTMENT OF A PRICE GOUGING PENALTY ON OIL COMPANIES WITH A REQUEST THAT LOCAL OIL TAXES ARE PRESERVED (CITY COUNCIL)
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I. SUMMARY
This item transmits a request for City Council to consider taking a position of support and sending a corresponding letter to Governor Gavin Newsom and carbon-copied to state legislatures in support of the Governor's efforts to enact a Price Gouging Penalty on oil companies. The letter would also request that the final bill include language that ensures that any penalties imposed by the statue not interfere with any locally levied taxes and/or fees. This would preserve the City's current revenue from all fees and taxes currently imposed on oil companies through the Caron Municipal Code.
II. RECOMMENDATION
Recommendation
TAKE a position of SUPPORT and DIRECT staff to transmit a corresponding letter.
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III. ALTERNATIVES
TAKE another action the City Council deems appropriate and that is consistent with applicable laws.
IV. BACKGROUND
From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States. Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States. During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners' facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners' f...
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