Gas prices could be affected by ballot measure

By: EDMOND JACOBY - Staff Writer | Tuesday, February 15, 2005 10:45 PM PST ∞

Californians could have a chance next year to vote on the volatile issue of gasoline prices. The actual price of gas won't be on the gubernatorial primary ballot June 6, 2006, but Initiative 1074, which is just now beginning the process of gathering signatures, may be if its backers can get 374,000 registered voters to sign petitions by July 7.

Sponsored by Los Angeles civic activist Celes King IV, the measure would create a California Petroleum Commission that would be responsible for telling refiners and retailers in the state how much they may charge at the pump for gasoline.

King, whose hand-written letter to the attorney general seeking title and summary for the measure that would add a new division to the state's Business and Professional Code launched the process, did not returned repeated telephone calls to a Los Angeles business owned by the King family. The cellular telephone number given as a contact in his hand-written letter was no longer in service, according to the cellular company.

The price set by the commission would allow the companies a profit margin of just 5 percent for all of their operations. And the commission, as described in the initiative, also would license petroleum producers and would have the power to deny licenses to companies that refuse to construct any additional facilities needed to alleviate the state's perpetual supply shortage, a principal reason for California's higher-than-anybody gas prices.

Consumers might find appealing the prospect of forcing the state's refiners to lower their prices, but some observers caution against jumping on the bandwagon too quickly.

"The history of gasoline price regulation is a pretty good example of the way regulation can make consumers worse off," said Severin Borenstein, an economist at the University of California, Berkeley, and head of the California Energy Institute. Borenstein was referring to efforts by the federal government to regulate gasoline prices in the 1970s, when widespread shortages led to dramatic retail price leaps.

"It would be very unfortunate if California's consumers stuck their heads in the sand and tried to pretend that the state's gasoline supply problem was one of being ripped-off by 'them,' " he said.

Anita Mangels, spokeswoman for the Western States Petroleum Association, an industry organization, said that the petroleum industry "has been and always will be one of the most regulated industries in the country.

"The real issue is the imbalance of supply and demand, and until steps are taken to relieve that imbalance market volatility will be a fact of life," she said.

"When there's a real shortage in the market, not allowing prices to go up would make the problem much worse," said Borenstein.

"In practice, the 5 percent limit on profits is completely unenforceable."

The only contact information available from the Secretary of State's office was a post office box in Newhall.

The King family business, Celes King Bail Bonds Agency, founded by King's father, recently was featured in the motion picture "Domino," based on the real life adventures of former London fashion model Domino Harvey who gave up her modeling career to become a bounty hunter for the Los Angeles firm.

Contact staff writer Edmond Jacoby at (760) 739-6675 or ejacoby@nctimes.com.