SB X1-2 (Ch. 1, Stats. of 2023-24 Ext. Sess.), the California Gas Price Gouging and Transparency Law, established the Division of Petroleum Market Oversight (DPMO) as an independent division of the California Energy Commission (CEC).
DPMO is charged with protecting consumers through market oversight, investigations, economic analysis, and policy recommendations related to the transportation fuels market. SBX1-2 also requires DPMO to annually report its findings and recommendations to improve market performance to the Governor, the Legislature, the CEC, the Attorney General, and the California Department of Tax and Fee Administration (CDTFA). This is DPMO’s first full-year annual report.
Chapter 1 (“Introduction”) summarizes DPMO’s market oversight, investigations, economic analysis, and policy recommendation functions under SB X1-2.
Chapter 2 (“Gasoline Market Conditions”) provides a high-level overview of gasoline market conditions last year, including price levels, supply changes, and demand trends.
Chapter 3 (“Demystifying California Gasoline Prices”) details DPMO’s preliminary analysis of the net price difference between retail gasoline in California and in the rest of the U.S., after accounting for taxes, fees, and environmental program costs. DPMO finds that this difference is likely driven by higher gross gasoline industry margins, which may be associated with the exercise of market power through vertically controlled sales channels.
A Technical Appendix (“Gasoline Price Analysis: Methods and Findings”) describing methods, data sources, and assumptions accompanies this report.
Author(s)
Dr. Gigi Moreno, Dr. Esther Shears, Dr. Wenche Wang, Varsha Sarveshwar, Chase Madson
