Gas prices: Gov. Hobbs asks California Gov. Newsom to hold off on oil company regulations

PHOENIX - Arizona Governor Katie Hobbs says a decision in California could affect gas prices here.

It’s why she co-authored a letter to California Governor Gavin Newsom asking him to kill a bill that would cut the supply of gasoline.

Newsom wants to regulate the oil companies and force them to maintain a minimum level of gas in their inventory so that they can’t spike the price when the supply drops.

Newsom’s mailbox lit up this week with a letter from Hobbs and Nevada Governor Joe Lombardo asking him to re-evaluate the implications of the new legislation aimed at regulating six oil refineries in the region.

"This legislation from California is concerning because we believe it will create shortages that will increase prices for Arizonians," Hobbs said.

Newsom’s plan is to mandate the oil companies to keep a minimum level of gas in their inventory.

"Supply drops with unplanned and planned maintenance," Newsom said. "Then we see huge increase in profits and costs to those going to the pump. We're trying to get our arms around that."

Hobbs and Lombardo say Arizona and Nevada are reliant on California pipelines for significant amounts of fuel. They believe the new rules would keep more gas in California, creating gas shortages in the Sun Belt.

"By mandating those inventory reserves, that could really threaten and decrease supplies coming into Arizona," said Blaise Caudill, energy policy advisor for the governor’s office. "Once you decrease those supplies coming into the state, then prices could rise. So really, why our concern is flagging, is this could have a negative impact on Arizonians."

At a news conference Wednesday, Hobbs said Newsom said they will continue talking about the issue. However, in California, he spoke enthusiastically last week about getting the bill passed.

"I would imagine that should worry us a little bit more to be played as fools, to see price spikes and have no solution, no answer to allow these guys to run roughshod over us, to lie and deceive us for decades as we know they've done," Newsome said about the oil companies.

Hobbs and Lombardo ended their letter by asking him to delay the legislation and open the conversation to include Arizona and Nevada, who also want low gas prices.