California may punish oil companies for high gas prices

By ADAM BEAM
Associated Press

SACRAMENTO, Calif. (AP) — A bill to punish oil companies for profiting from price spikes at the pump has passed the California Senate. The first-in-the-nation proposal is in response to price spikes last summer. The average price of a gallon of gas in California hit a record high of $6.44 last year. Gov. Gavin Newsom responded by asking lawmakers for a penalty on excessive oil profits. Instead, lawmakers negotiated with Newsom on a bill to empower state regulators to decide whether to impose a penalty. The oil industry argues the proposal will backfire and decrease the supply of gasoline. That could cause prices to increase.