(The Center Square) – Average California gas prices remain near $5 per gallon despite national gas prices plummeting amid falling oil prices, leading many Californians to wonder why their gasoline is the most expensive in the United States.
While Gov. Gavin Newsom says price gouging from fuel producers is to blame — which his own energy czar says is not the case — California leaders say much of the difference comes down to fees paid by California drivers to pay for everything from bike lanes to the state’s long-ongoing bullet train.
“Despite Gavin Newsom’s tin foil hat conspiracy theories about ‘gas price gouging,’ the only one ripping off Californians at the pump is him,” said Assembly Minority Leader James Gallagher, R-East Nicolaus, to The Center Square. “From raiding gas tax money for bike lanes to bankrolling his failed bullet train with cap-and-trade revenue, Newsom has jumped at every opportunity to line his friends’ pockets at the expense of California drivers.”
Notably, gasoline in California is even more expensive than that in Hawaii, which produces no oil of its own and must ship everything across the Pacific Ocean.
According to AAA, the average California gallon of regular-grade gas is $4.95, while the national average is $3.23. In neighboring Oregon, gas is $4 per gallon; in Nevada, $4.01 per gallon, and in Arizona, just $3.41 per gallon.
Stillwater Associates said that in February 2024, taxes and fees added $1.36 to the cost of each gallon of gas with 18 cents in federal gas taxes, 58 cents in state gas taxes, a two-cent state underground storage fee, 42 cents to the state’s cap-and-trade emissions program and 11 cents from the state’s low-carbon fuel standard.
The main recipient of the state’s cap-and-trade program is the $135 billion high speed rail program that is one day supposed to connect Los Angeles to San Francisco, which receives 25% of greenhouse gas reduction funds from emissions cap-and-trade proceeds. The first, $35 billion segment of the train still is $7 billion short of funding, and may connect the Central Valley communities of Bakersfield and Merced by 2033 if funding is secured.
Since Stillwater’s report, the California Air Resources Board — all but two of whose voting members are appointed by the governor — voted to tighten the state’s low-carbon fuel standard, which the state says will increase fuel costs by $162 billion through 2046.
Under the new LCFS, which has been temporarily delayed by the state’s administrative agency, California drivers could pay up to $1.15 more per gallon of gas this year.
The main recipient of the state’s cap-and-trade program is the $135 billion high speed rail program that is one day supposed to connect Los Angeles to San Francisco, which receives 25% of greenhouse gas reduction funds from emissions cap-and-trade proceeds. The first, $35 billion segment of the train still is $7 billion short of funding, and may connect the Central Valley communities of Bakersfield and Merced by 2033 if funding is secured.
According to the Tax Foundation, in fiscal year 2018, California gas taxes covered 99.7% of road spending in the state. Four years later, the increased use of electric cars, which do not pay gas taxes and instead come with a slightly higher annual vehicle registration fee, has led to gas taxes covering only 89.2% of road spending, leading the state to propose a mileage tax, replacing or possibly on top of the existing gas taxes. Proposals for monitoring mileage for accurate taxation range from installing trackers in cars, requiring tracking apps on cellphones, or requiring verified odometer readings via inspections.
