SAN FRANCISCO -- California's greenhouse gas reduction law already has shaken up the state's industrial sector, costing it more than $1.5 billion in pollution permit fees.

It's now poised to hit the pocketbooks of everyday Californians.

Starting next year, the law will force distributors of gasoline, natural gas, propane and other consumer fuels into the same cap-and-trade marketplace as utilities and major manufacturers.

The oil industry says that will lead to price increases of at least 12 cents a gallon immediately. State regulators say any price spikes could vary widely, from barely noticeable to double digits.

Senate President Pro Tem Darrell Steinberg says the additional fuel costs eventually could spike as high as 40 cents a gallon and has proposed an alternative -- a flat carbon tax starting at 15 cents a gallon.

AP-WF-03-09-14 1516GMT