Starting from July 1 (Wednesday), California will see a new round of gasoline tax increases, which will lead to an increase in fuel costs for residents.
According to data from the California Department of Tax and Fee Administration, starting Wednesday, the gasoline consumption tax in California will be raised from 61.2 cents per gallon to 63.4 cents, and the diesel tax will go up from 46.6 cents to 48.2 cents.
July 1 every year marks the day when California automatically adjusts its gasoline tax. The tax hike stems from the SB1 bill passed in 2017, aimed at gradually increasing gasoline taxes and vehicle registration fees over a 10-year period to generate an additional $5.2 billion in revenue for the state annually.
Despite this year’s increase per gallon not being significant, fuel prices in California have remained persistently high. Coinciding with the upcoming Fourth of July holiday, which is one of the busiest times for driving across America, the further hike in gasoline tax is expected to increase the cost of outings for residents.
A congressional delegation led by California Republican Representative David Valadao is urging Governor Gavin Newsom to halt the gasoline tax increase plan.
In a statement, Valadao pointed out that as of July 1, the gasoline tax in California will reach as high as 63.4 cents per gallon, and when combined with state sales tax and other local fees, selling 1 gallon of gasoline in California will incur an additional cost of up to $1.15.
“California drivers are paying nearly $2 more in gasoline prices compared to the national average,” Valadao said, noting that many families are struggling with high living costs and are “unable to bear” the additional gasoline tax burden.
According to data from the American Automobile Association (AAA), the average price of regular gasoline in California on June 30 was $5.43 per gallon, much higher than the national average of $3.84.
There is significant variation in gasoline prices across different counties in the state, with Los Angeles County averaging $5.43 per gallon, San Diego County around $5.49, Orange County around $5.32, Riverside County around $5.26, Ventura County around $5.39, San Francisco in Northern California around $5.60, and Bakersfield in Central California around $5.64.
Additionally, three counties have average regular gasoline prices exceeding $6 per gallon: Mono County at $6.73, Sierra County around $6.10, and Inyo County in the Eastern part at around $6.16.
California has long been grappling with high fuel prices and is facing serious energy challenges this year.
Last year, the Phillips 66 refinery in Los Angeles announced its closure. In April, Valero Energy Corp. also shut down its Benicia refinery in the San Francisco Bay Area. Part of the reason was the implementation of stringent climate regulations and fuel standards locally, affecting operational viability.
Phillips 66 and Valero account for nearly one-fifth of California’s gasoline supply. The decrease in fuel production capacity may mean California will need to purchase more crude oil and gasoline from external sources.
While the California Energy Commission states that Phillips 66 and Valero will continue to supply California adequately, an industry representative organization has indicated that due to reduced supply, fuel prices will ultimately rise.