The New Muckrakers Find Who’s Gouging California’s Drivers

By Craig Eyermann of The Independent Institute.

"Over ninety years ago, muckraking author Upton Sinclair ran a failed campaign to become California’s governor in 1934. He later recounted the experience in his very forgettable book, except for one quote, “I, Candidate for Governor, and How I Got Licked.”

The one quote that stands out in Sinclair’s account of his campaign stumping is this one:

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

There is perhaps no better quote to understand California’s politicians. Today, there is perhaps no better example of this insight at work than California Governor Gavin Newsom’s ongoing efforts to find evidence of oil companies gouging California consumers. Writing in the Sacramento Bee in March 2025, Nicole Nixon recounts Newsom’s quixotic quest:

Two years after California’s Democratic leaders declared victory over big oil with a law aiming to crack down on industry profits, the state has been unable to prove companies engage in price gouging when the cost of gasoline spikes in California.

Since late 2022, Gov. Gavin Newsom has accused the oil industry of ripping off California drivers, pointing to an extreme price spike in the state compared to the rest of the country – while companies reported record profits.

“Open your books and prove that you’re not price gouging. Otherwise, you – big oil – will pay the price, not consumers,” then-Sen. Nancy Skinner said after Newsom signed the bill she authored that created an industry watchdog division and gave the California Energy Commission authority to cap oil company profits and return funds to taxpayers.

But the state hasn’t leveled any penalties on oil refining companies since the law passed and has even stopped posting the data it required.

California’s politicians and the bureaucrats at the state’s Energy Commission are a perfect example of people whose salaries depend on their not understanding things. They could never find evidence of “Big Oil” gouging California consumers because there never was any to find. It was all a scheme aimed at low-information California voters to keep them from getting angry enough to vote out the state’s ruling politicians.

This recent history is front and center today because the price of a gallon of gasoline in California has once again spiked above that in every other state.

Only now, a new generation of muckraking journalists dug into the story of why California’s fuel prices are so much higher than in every other state and found the real culprit. Here is a bullet point summary of what CBS News California discovered after just six months of investigating:

• Why California gas costs more: Higher taxes, labor and business costs, combined with environmental programs, regulations, and the state’s unique fuel blend, drive up baseline prices.
• The political narrative is shifting: After failing to prove price gouging — and grappling with the impact of two shuttered refineries — state leaders are now publicly acknowledging the need to incentivize oil companies to stay.
• Why refineries are leaving: Rising costs, increasing regulations, long-term policy uncertainty, and shrinking returns
• Why global conflict matters: California’s growing reliance on overseas refining is increasing volatility — and validating long-standing industry warnings that outsourcing refining increases the risk of price spikes.

It turns out that 55% of the price of a gallon of gasoline in California is due to factors specific to California, especially those imposed by the state government. Amazingly, the state reports that it collects more in taxes per gallon than oil companies make in profit.

California’s politicians are the ones gouging California’s consumers. But don’t expect them to do anything about it because their salaries depend on their not understanding it."