California Faces Additional Challenges After Gas Tax Increase

California’s gas tax will increase by 2 cents starting July 1. The increase is part of an attempt to reduce emissions, but how do these prices compare to the national average, and what will this new take look like in practice?

Prices in real-time

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California’s current gasoline tax is 57.9 cents a gallon. With the increase, it will rise to 59.6 cents a gallon. The overall cost with federal taxes and fees is around $1.20, showing that gas prices have jumped 55 cents a gallon compared to the same time last year.

The average cost of gas in California

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 The average cost of gas in California is nearly $5.40 a gallon, which is significantly higher than the $3.66 national average, according to AAA data. Californians pay the highest gas tax in the US, and it created a 

The predicted rise in the upcoming years

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The Low Carbon Fuel Standard (LCFS) is designed to decrease carbon intensity and provide an increasing range of low-carbon and renewable alternatives. The program was started in 2007 by then-Governor Arnold Schwarzenegger. The latest reports predicted a rise of 47 cents per gallon in 2025 and 52 cents in 2026, plus the existing state tax.

Political clashes

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Californian Republican lawmakers have tried to suspend the gasoline tax. However, Governor Gavin Newsom’s response was to sign a bill that gives a commission the power to punish oil refiners who make too much money off California drivers.

Republicans on the new tax

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State Senator Janet Nguyen discussed the new tax hike with Fox News Digital. The Senator said that many people need help understanding the differences between the carbon and state taxes, adding that he believes people will likely brush it off as another state tax. 

California exodus

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Nguyen said that the hike is a “secret” tax increase and discussed the price rise, which is driving people out of California. The Senator further told KTVU that because of the state’s lack of transparency, people would end up paying over $6 a gallon. 

CARB disagrees

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The Low Carbon Fuel Standard (LCFS) is providing credits to producers of low-carbon fuels. Producers of high-carbon fuels fund these credits, a spokesperson explained. Importantly, it’s emphasized that the LCFS is not a tax, and no funds go to the state government.

Low-income Californians

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San Diego County Supervisor Jim Desmond commented that this was not the right time for another tax. He explained that people are already paying too much. The Senate Energy Committee also raised the question of how this will impact low-income Californians. Some commented that the tax hike sounds like a minor increase but adds up. 

Gas prices and minimum wages

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Some parts of the Golden State recorded prices up to $7.29 per gallon in April. This is higher than the federal minimum wage of $7.25 per hour since 2009. The minimum wage in California is significantly higher, though many argue it’s reasonable considering the state’s living costs.

Carbon neutrality by 2045

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CARB aims to achieve carbon neutrality by 2045, and considering how much Californians rely on their vehicles, this is dubbed one of the most ambitious programs in the US and worldwide. 

Real-life effect

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One mother of four, Briana Chiddick, said that each trip, from school pick-ups to grocery shopping or visiting friends, costs an additional 2 cents. Things have worsened since everything in the state is seemingly more expensive, from food to housing. But the high prices might be a reflection of something else. 

Blaming the companies

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San Diego State University economist Joe Silverman believes that oil companies are raising prices in anticipation of California’s 2035 mandate for all new cars to be zero-emission. He wondered what would happen to oil refineries if all state residents turned to electric vehicles.

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