What is Newsom thinking?

One of the responsibilities of government is to prevent monopolization. Here is where Newsom and the government have failed us. The California oil industry has basically become a cartel. Have you ever come to a corner where there are several gas stations and their gas prices are exactly the same? Theoretically they should have arrived at the price independently, but that did not happen. Oil companies have decided not to compete on price. They realize that if they lower their price the guy across the street will lower his to match. So, it’s better to leave the prices high and ostensibly compete on quality and service.

Newsom’s grandstand play of threatening a tax on profits is probably being laughed at in oil company boardrooms. You raise taxes and we’ll raise gas prices. Any tax will just get passed on to the consumer. Newsom’s only real move is to break up the cartel and reestablish a competitive marketplace. If that’s not possible, then create a state owned oil company to compete with big oil.

Steven Howard

Redwood City