(The Center Square) – California’s gas prices are the highest in the nation after a July 1 gas tax increase. The state’s gasoline is even more expensive than that of Hawaii, which has no oil production and must ship its fuels across the Pacific Ocean.
California gas prices are at $4.79 per gallon for regular-grade fuel, higher than Hawaii, where fuel is $4.69 per gallon, and Washington, where fuel is $4.29 per gallon. On July 1, California gas taxes increased to 59.6 cents per gallon, a number that does not include other taxes and fees that add a total of $1.62 per gallon to California gas. With the American national average at $3.52 per gallon, California’s taxes and fees add up to more than the cost difference between California gas prices and national gas prices. Because the federal government and each state charge gas taxes, this pricing gap suggests if California were to adopt similar gas taxes in line with the rest of the nation, prices would converge with the national average.
Rising numbers of electric vehicles are starting to eat into the state’s gas tax revenues, which has led the state to pilot a per-mile fee program that would capture more revenue from non-gas vehicles. California’s roads used to be essentially entirely funded by gas taxes, but reduced numbers of gasoline-powered vehicles have dropped gas-tax funding to 80% of road costs. A gas tax is essentially a mileage, efficiency, and weight tax on vehicles; heavier vehicles which cause more wear on roads use more gas, and thus pay more in gas taxes. To make up for the fact that electric vehicles, which tend to be heavier than the equivalent gasoline-powered car due to the weight of batteries, do not use gasoline, California charges up to $175 per year extra for electric vehicle car registrations, a number the state says makes up for about a third of what gas-car drivers pay through gas taxes.
The state of California is testing out two mileage based systems, first a “pay at the pump” and “charge” fee model that replicates the current “pay-as-you-go” approach to gas taxes, and the use of “in-vehicle telematics” from vehicles themselves, tracking from insurance companies that charge per-mile, and GPS data to accurately determine mileage costs and ensure fees are only charged for use on public, not private roads. Odometer entry is one final option, that could have payment due on a monthly or other regular basis and come with fewer privacy concerns. The state’s pilot ends in January 2025 and should have data out in the following months.
