At a time when the average oil prices are falling across the United States, the California government has decided to go against the trend: starting from July 1st, Californians may face another wave of significant gasoline price increases, and this surge seems to be stronger than ever.
California currently has the highest gas prices in the nation. According to data from the American Automobile Association (AAA), the average price for regular gasoline on June 26th was $4.62 per gallon, significantly higher than the national average of $3.22 per gallon. As July 1st approaches, California drivers will also face a double blow of gasoline tax increases and the implementation of stricter low-carbon fuel standards.
July 1st every year marks the day when California automatically increases gasoline taxes. The tax hike is based on the SB1 bill passed in 2017. The aim of this bill is to gradually raise gasoline taxes and vehicle registration fees over a 10-year period, generating an additional $5.2 billion in revenue for the state each year. Therefore, in a few days, California’s gasoline tax will increase to 61.2 cents.
Meanwhile, California’s more stringent low-carbon fuel standards will also come into effect on the same day. Last November, the California Air Resources Board (CARB) approved these standards to incentivize investments in alternative vehicle fuels such as electricity, hydrogen, and biofuels to replace traditional fossil fuels. CARB mandates refineries to produce cleaner fuels but with stricter regulations, leading to further increases in oil prices.
Analyses from the University of Southern California and the University of Pennsylvania suggest that this new regulation will increase gasoline prices by 65 cents, coupled with the gasoline tax hike, resulting in an overall price increase of nearly 70 cents.
Republican lawmakers in both houses of the California legislature have repeatedly attempted to pass legislation to stop the continual rise in oil prices, but the Democratic-controlled state legislature has not agreed.
“Democrats in Sacramento continue to block relief at the pump, refusing to lighten the burden on working families as gas prices skyrocket. Californians deserve better,” expressed Republican Chinese-American Assemblymember Vince Fong on social media.
Regarding the trend of California oil prices, some believe that the comprehensive ceasefire agreement between Israel and Iran has eased the extent of oil price surges. However, some analyses point out that the simultaneous implementation of gasoline tax hikes and the “low-carbon fuel standards” will require California drivers to prepare for prices exceeding $6.
Calculating based on using 1 gallon of gasoline per day, at the current average price, each California driver’s annual fuel cost would be $1,686; once the price reaches $6, the cost will increase to $2,190. Some drivers may see their costs increase by over a thousand dollars.
The rising oil prices are expected to bring economic burdens to many families. In response, Republican lawmakers in California have signed a joint letter and launched an online petition on change.org, calling on Governor Newsom to suspend the tax increase and postpone the implementation of the low-carbon fuel policy.
Senate Minority Leader and Republican Senator Brian Jones stated in the petition introduction, “The new amendment to California’s fuel standards is costly, raising the price of gas by 65 cents per gallon.” He added, “Californians are already facing the highest gas prices in the nation. Hard-working families should not be forced to pay more.”
“I will continue to fight in the legislature… but policymakers need to hear from you,” he urged the public to participate in the petition as soon as possible, urging California legislators to repeal the stricter low-carbon fuel standards and “take action to prevent this crisis before it’s too late.”
Jones hopes to gather 50,000 signatures through the petition, and as of the deadline, over 31,000 people had signed online. ◇