Gavin the Magician Tries Sleight-of-Hand With Gas Prices

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The key to a successful magic performance is to keep your audience’s attention away from the movement that makes the magic trick work. Governor Gavin Newsom plays the magician when he calls for an Attorney General investigation of oil companies for overcharging gas prices. That move keeps voters’ eyes away from the chief reason for high California gas prices—government mandates.

As we know, Californians pay more for gasoline than practically any other place in the country. A major reason is government demands for taxes for road construction and maintenance, special requirements in manufacturing cleaner burning fuels, and the cap-and-trade program to allow companies to buy carbon credits.

A majority of voters accept this additional cost as California wants to take on the problem of congested roads and dirty air. But, it’s also California’s expensive cost-of-living, also tied to government demands, that adds to costs not experienced in other states.

California businesses, including your local gas station, pays more in taxes, labor costs and utilities that other places.

California’s restrictive rules about oil drilling and production and the state’s demand for fuel means the state must take in an extraordinary amount of costly foreign oil.

All of this runs up the cost of gasoline in the Golden State. But what about the “mystery surcharge” Governor Newsom asked the Attorney General to investigate?

California’s expensive cost-of-living contributes as does the state’s limited refineries which affect the price of gasoline, especially when some of the refineries are closed for gasoline seasonal formula change or refinery refurbishing. The reason name brand gasolines cost more, according to a report issued at Newsom’s request, is not because of price fixing or false advertising. It could simply be the result of consumer confidence in name brand products and the competition between the name brands.

The biggest reason that Californians pay more for gasoline than other Americans is because California government officials and regulators want it that way.

The Attorney General’s investigation is not the first time California officials have called for an investigation into high gas prices. In fact, it seems to be a regularly scheduled practice every few years. Usually, nothing comes of the examinations. Will see if this new effort follows historical form.

Meanwhile, when consumers start a slow simmer about gasoline prices and the largest portion of the cost is government driven, the thing to do is take the voters’ eye off the ball and start an investigation of oil companies. The sleight-of-hand says look over here at those greedy corporations don’t look at the government wizards behind the curtains.

That is what Gavin the magician is doing.

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