California Gas Prices Set to Rise Due to New Tax Regulations

News Summary

Starting July 1, California drivers will face higher gas prices due to new taxes, including a 1.6 cents per gallon increase in the excise tax. With current averages at $4.484 per gallon, estimates suggest prices could soar to $6 and even reach $8 by 2026 fueled by tensions abroad, refinery closures, and the Low Carbon Fuel Standard program. Criticism of the new policies reflects concerns over rising costs and their impact on residents, prompting legislative proposals to mitigate price spikes.

California drivers will soon face higher gas prices as new taxes and regulations take effect on July 1. The state’s excise tax on gasoline will increase by 1.6 cents per gallon, and estimates suggest that gas prices could soar to as much as $6 per gallon as a result. The recent $4.484 average for gas prices in California is already the highest in the nation, and these changes are likely to push prices even further.

The implementation of the Low Carbon Fuel Standard program, which was approved by the state’s air resources board in November, is likely to significantly impact consumers at the pump. According to estimates, this program could add an additional increase of 65 cents per gallon. The Automobile Club of Southern California has assessed that the combined increases from the gas tax and the Low Carbon Fuel Standard may cost drivers between $600 to $1,000 annually.

Tensions in the Middle East and the recent closure of two refineries may also contribute to rising gas prices, with predictions indicating that prices could hit $8 per gallon by the end of 2026 if these factors continue. In response to the impending hikes, an online petition demanding the repeal of the Low Carbon Fuel Standard has gained over 25,000 signatures, indicating significant public dissent.

While some officials, including the state Senate Minority Leader, contest the anticipated price increases, Governor Gavin Newsom’s office has released a fact-check memo insisting that the expected increase will only be in the range of 5 to 8 cents due to these new taxes and regulations. The previous Low Carbon Fuel Standard enacted added approximately 9 cents per gallon, and the revised version is estimated to impose a similar increase.

The revised standard aims to reduce greenhouse gas emissions and imposes stricter regulations on gas producers. Lawmakers have described the financial burden as “price gouging” under the current administration. In light of these concerns, new legislation proposed by Democratic lawmakers seeks to cap fuel credit prices to help prevent sharp spikes in gasoline prices.

Critics of the Low Carbon Fuel Standard argue that claims of significant emission reductions attributed to the program, particularly regarding biofuels, may be overstated. In the midst of scrutiny surrounding this program, the California Energy Commission is actively engaged in discussions with buyers to ensure refineries remain operational following the anticipated closures.

As California prepares for the changes on July 1, consumers are already feeling the impact, with the San Diego area reporting prices ranging from $3.99 to $5.39 per gallon at various gas stations as of June 30. With gas prices expected to rise, residents may face increased financial strain due to the confluence of tax hikes, regulatory changes, and broader market trends affecting gasoline availability.

In summary, starting July 1, California drivers will see an increase in gas prices caused by several factors, including a rise in excise tax and the implementation of the Low Carbon Fuel Standard. These changes have ignited a debate among state officials and the public, with significant implications for the state’s economy and residents’ wallets.

Deeper Dive: News & Info About This Topic

• LAist: Controversial Climate Rule Likely to Raise Gas Prices
• Wikipedia: Gasoline Pricing
• Politico: Newsom on California’s Fuel Standards and Prices
• Google Search: California Gas Prices
• CBS News: California Democrats Propose Relaxed Emissions Rules
• Google Scholar: California Fuel Emission Regulations
• SF Chronicle: California’s Valero Refinery Situation
• Encyclopedia Britannica: Fuel Economy
• SFGate: Experts on California Gas Prices Outlook
• Google News: California Gas Price Legislation