From ABC7 in California:
Gov. Gavin Newsom wants investigation of state’s high gas prices
California’s governor has asked the attorney general to investigate why the state’s gas prices are so high, pointing to a new report suggesting big oil companies are “misleading and overcharging customers” by as much as $1 per gallon.
Name brand retailers – including 76, Chevron and Shell – often charge more because they say their gasoline is of higher quality. But a new analysis from the California Energy Commission could not explain the price difference, concluding “there is no apparent difference in the quality of gasoline at retail outlets in the state.”
The commission said California drivers paid an average of 30 cents more per gallon in 2018, with the difference getting as high as $1 per gallon in April of this year. The result is California drivers paid an additional $11.6 billion at the pump over the last five years.
“There is no identifiable evidence to justify these premium prices,” Newsom wrote in a letter to Attorney General Xavier Becerra. “If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public.”
Becerra’s office said in an email it had received Newsom’s request and “will handle accordingly.”
See, it must be those greedy capitalist oil companies squeezing the money out of California’s residents.
Except it’s not.
First of all, gas stations in California can’t sell regular gasoline. They have to sell California approved Reformulated Gasoline (RGF). The only refineries that produce that are in California, no new refineries can be built and many have been shut down in recent years.
Governor Gavin Newsom came into office and expanded the state’s Cap-and-Trade plan on carbon emissions. This has added costs to refining by forcing refineries to buy more carbon credits.
California has the highest gas taxes of any state at $0.61. Add in the 9% sales tax, Cap-and-Trade tax, and everything else, and it’s no wonder that Californians pay so much in taxes.
This is entirely the fault of California’s state government regulating and taxing gasoline.
“So what” you say. You don’t live in California.
This same basic principle, the government regulates a commodity to death then acts shocked when it becomes egregiously expensive is the cause of the high healthcare costs in the United States.
Every single Democrat (including Tulsi Gabbard) has a plan to deal with high prescription drug prices… and that plan is to impose a price fix like the European nations do.
What has price-fixing done in Europe? It has severely curtailed R&D on pharmaceuticals in Europe. That has driven up the cost of drugs in the United States as pharmaceutical companies raise prices here to make a profit that they cannot make in Europe.
Much like how our military development was an indirect subsidy of the “European lifestyle” since they didn’t have to spend as much on defense knowing we’d protect them. Americans have been paying at the pharmacy to indirectly subsidize the “European lifestyle” funding pharmaceutical and medical device R&D.
But I digress…
Limiting Medicare and Medicaid reimbursements have also driven up prices by forcing non-government healthcare beneficiaries to be the sources of profit for doctors and hospitals.
Then there are the various regulations on health insurance, everything from annual open enrollment to mandatory coverage, to prohibition on selling insurance across state lines and removed or limited every benefit of the free market system from healthcare.
The free market is the best system for reducing prices while increasing supply and quality. When that is trampled on by government regulation the result is always higher prices, shortages in availability, and reduced quality.
Then these same people are always agog when prices go up.
The Soviets could never quite figure out why their economists and mathematicians were never able to plan the economy the way they had hoped.
What California has done to gasoline, the Federal government has done to healthcare. If the Democrats in 2020 get their way, they will do it harder and make it infinitely worse.
2 thoughts on “California’s gasoline problem, healthcare, and the Democrats’ total lack of understanding of basic economics”
Several years ago gas prices were the “highest ever recorded” and the left was wringing their hands over how it was all Bush’s fault and the prices would “ruin the economy.” Some conservatives suggested (temporarily) lowering the federal gas tax, OMG per the media, they were advocating “the end of the world as we know it.”
Somewhat-recently took a road trip to Southern California. Driving back, no kidding, the last gas station in CA had the price at $4.20/gal. The first gas station outside CA: $3.05/gal. Maybe 10 miles physically separating them, but across the border may as well have been another country.
Add in their nearly-10% sales tax, hotel/hospitality tax, and taxes on every other thing you can purchase or experience, and it was a VERY expensive trip. The power is not 100% reliable, the highways are in a perpetual state of construction (which restricts traffic but never seems to actually improve the roads), and the tap water looks, smells, and tastes like a pool somebody s#$t in. Makes one wonder where all those tax dollars go, if not to keep the lights on, commerce moving, and water clean.
Never so glad to be home.
As for Gov. Newsom’s “investigation” into the high gas prices, I predict it will cost CA tax-payers a few million dollars (a drop in the bucket compared to what they’re paying), and the end result will be someone recommending new environmental proposals that will lower the price from $4.25 to $4.50.
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