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California Gas Taxes to Increase Despite Record-High Prices

California Gas Taxes to Increase Despite Record-High Prices

May 1, 2024

California Gas Taxes to Increase Despite Record-High Prices

California will see a further increase in gas taxes by 2 cents per gallon starting July 1, bringing the tax to nearly 60 cents per gallon. This decision comes amid soaring gas prices across the state, with an average price per gallon already $1.70 higher than the national average. As reported by the American Automobile Association, on Tuesday, the state's average hit $5.39 per gallon, in stark contrast to the national average of $3.66.

The surge in California's gas prices, which began rapidly increasing after February, is attributed to supply shortages due to both scheduled and unscheduled maintenance at state refineries and the switch to a summer blend of gasoline that is more 'eco-friendly' but also more costly. The state-mandated summer blend alone adds an extra 20 to 25 cents per gallon. Additionally, consumers are burdened with federal excise tax, 27 cents a gallon for the state's cap-and-trade program, an 11-cent low-carbon fuel tax per gallon, approximately 2 cents for underground gas storage fees, and another 3.7 percent in state and local taxes.

Despite these high costs and the impending tax increase, a state oversight agency has reported no evidence of wrongdoing by 'Big Oil' companies. The California Energy Commission, with its spokeswoman Sandy Louey, has been actively monitoring gas prices and considering various influencing factors such as supply, demand, and refinery operations.

Governor Gavin Newsom's establishment of the Division of Petroleum Market Oversight within the energy commission serves as an independent body to scrutinize and oversee the state's petroleum market. This division was created following a promise by Governor Newsom last year to penalize 'Big Oil' for profiting excessively while Californian consumers faced unprecedented gas prices in October 2022. However, to date, the agency has not identified or reported any legal violations by the petroleum industry.

For diesel fuel, state officials have declared an increase in the tax from 44.1 cents per gallon to 45.4 cents. This latest development continues to raise concerns amongst California drivers who are already experiencing significant financial pressure at the pump.

California's decision to increase gas taxes in the face of already record-high prices has brought the state's fuel costs under significant scrutiny. While oversight bodies are actively investigating the situation, the immediate future suggests continued financial strain for Californian motorists, with no current evidence pointing towards industry malpractice.

The Epoch Times Article


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