Why Are California Gas Prices So High These Days? Thank Sacramento.

Why Are California Gas Prices So High These Days? Thank Sacramento.

Benjamin Franklin was right that “nothing is certain but death and taxes,” though he could have added a third certainty in California – paying significantly more than the national average for gasoline.

California drivers are living a real life version of the movie “Groundhog Day”, more than $4 per gallon for gasoline.

According to AAA, the average gas price in California was $4.18 per gallon as of October 7.  They note that the Golden State experienced a 16 cent per gallon jump in just one week.

In contrast, the national gas price average was $2.65 per gallon, which represents a spike of 9 cents per gallon over the previous month, but is 26 cents per gallon cheaper than the national average price in October 2018, according to AAA.

Once again, angry California drivers are asking why they are paying so much more per gallon of gas than drivers in other states?

Yes, as AAA notes, some of the answer is explained by supply and demand.  They point to issues with a Chevron refinery in El Segundo and a shutdown at a Shell refinery in Martinez, as well as complications from PG&E’s blackouts shutting down some gas stations that are unable to pump gas without electricity.

But the real reason we’re paying so much more is high taxes and expensive regulations imposed by Sacramento politicians.

According to the American Petroleum Institute, Californians now pay 80.45 cents per gallon in total federal and state gasoline taxes (including federal and state excise taxes).  The price increased by 5.6 cents per gallon on July 1 thanks to another gas tax increase courtesy Senate Bill 1, the $52 billion gas tax increase enacted by the Legislature in 2017.

In yet another ranking where number one is not a good thing, Californians now pay the highest combined state and federal gasoline taxes in the nation.

But that’s not all.  State government regulations on oil production in California have added even more to the price of gasoline paid by Golden State drivers.

Adopted as part of California’s efforts to address global warming, the state’s low carbon fuel standard currently adds around 16 cents per gallon to the price of gas.  And these costs will increase.  A December 2018 report by California’s nonpartisan Legislative Analyst’s office predicts that the low carbon fuel standard will increase to approximately 46 cents per gallon by the year 2030.

Separately, the controversial cap-and-trade program, which was extended by the State Legislature in 2017, is estimated to add about 13 cents per gallon presently to the price of gas, according to the Legislative Analyst’s office.  This too is expected to increase in the coming years.

So, the next time you have to dig deep into your wallets to fill up, remember that you have Sacramento to thank for adding to the misery that we’re all experiencing just to buy the gas we need to drive to work or school.

Tim Anaya is the Pacific Research Institute’s communications director.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.