The California Fuels and Convenience Alliance (CFCA) has “continued to voice strong opposition to the State’s Legislative Special Session proposal to require refiners to maintain minimum inventory requirements. The proposal (previously SB 950 but now contained in ABX2-1) poses serious risks to both California's fuel market and to consumers, risks that would ultimately lead to higher prices at the pump, artificial shortages and greater market instability,” CFCA said in a press release.

Last week, the governors of Arizona and Nevada weighed in on the bill, stating that it would raise gas prices in their states. “The people of Nevada and Arizona should not have to foot the bill for California’s misguided policies—especially when it comes to higher gas prices,” said Nevada Governor Joe Lombardo in a statement.

According to CFCA, the “bill’s requirement for refiners to maintain contingency reserves could create artificial shortages by forcing refiners to withhold fuel that would otherwise meet market demand. This would likely exacerbate price volatility and supply chain disruptions. Furthermore, the bill fails to address California’s unique summer and winter gasoline blend requirements, potentially resulting in unusable reserves during periods of high demand. There is also concern that foreign entities could exploit the state's reliance on imported fuel during shortages, manipulating prices to their advantage. The burden on mid-sized businesses, which lack the resources to comply, could lead to further market consolidation and higher costs for consumers.”

CFCA went on to say that “equally concerning, ABX2-1 could have serious unintended consequences for unbranded gas stations that already operate on thin margins. Requiring refiners to maintain a minimum inventory would force them to withhold fuel from the market, reducing available supply during crucial times. Unbranded stations are often the last entity able to purchase gasoline from a refiner who has obligations to other purchasers. Therefore, increasing storage requirements means there are less options in the marketplace for unbranded stations to secure supply.”