Nov 26 (Reuters) - Chevron ( CVX ) said on Tuesday that

California's recently enacted legislation on oil refineries

needing to maintain minimum fuel stocks was "flawed," according

to a letter sent by the company to state Congress members.

California, the most populous U.S. state, consistently

experiences some of the nation's highest average gas prices,

leading to an often tense relationship between the state and oil

companies.

It is geographically isolated from the U.S. Gulf Coast and

Midwest refining centers, and must produce all its own motor

fuels or import them from Asia.

In the letter from Andy Walz, president of Chevron's ( CVX )

Downstream, Midstream and Chemicals business, he said increasing

regulation on the justification of "price spikes are profit

spikes" was "misleading."

On Oct. 14, California Governor Gavin Newsom signed into

effect ABX2-1, a bill designed to prevent fuel supply shortages

in the state and gives regulators at the California Energy

Commission (CEC) greater control over oil refineries operating

in the state.

It allows for the CEC to enforce refiners to maintain

minimum levels of fuel inventories, and manage necessary

refinery turnarounds and maintenance in consultation with labor

and industry stakeholders, so as to minimize the impacts of

maintenance-related production losses on fuel prices.

If refineries fail to comply with the requirements, they

could be fined a minimum of $100,000 per day for each day that

the noncompliance occurs.

"We contend that enforcing a mandatory minimum inventory

requirement will likely result in two negative outcomes: an

increased frequency and duration of supply shortages, and a

permanent rise in gasoline prices for consumers," Chevron's ( CVX ) Walz

said in the letter.

"Both risks extend beyond California, which should create

the need for the legislature to proceed with caution, as

policies that raise prices for the state could also affect

neighbors in Arizona and Nevada."

Governor Newsom's office did not immediately respond to a

request for comment.

(Reporting by Seher Dareen in Bengaluru)