Increased Tax Rate Makes California Gas Highest in US

A gas station in Huntington Beach, Calif., on May 31, 2024. John Fredricks/The Epoch Times

Drivers in California are paying the highest prices in the nation for gas this summer by nearly 6 cents after a higher gas tax went into effect earlier this month.

The extra 2 cents per gallon added July 1 was announced earlier this year by the California Department of Tax and Fee Administration. The department is required to adjust the gas and diesel fuel tax rates on July 1 each year, based on inflation.

For diesel, the state’s tax rose from 44.1 cents a gallon to 45.4 cents.

In all, the state charges about 60 cents a gallon now, which bumps up the already high cost state consumers pay at the pump during summer months, when gas stations are required to sell a special eco-friendly summer blend.

The additional bump puts California at the top of the list for the highest gas price in the United States with an average price of $4.75 a gallon July 15. The national average was $1.25 less at $3.52 a gallon, according to the American Automobile Association (AAA).

The state with the second most-expensive price for gas was Hawaii at $4.69 Monday, followed by Washington state at $4.27 and Oregon and Nevada both at $4 a gallon, AAA reported.

California and Hawaii are often the top two states for gas prices, according to AAA affiliate Auto Club of Southern California Spokeswoman Anlleyn Venegas.

“It’s usually between us and Hawaii,” Ms. Venegas told The Epoch Times. “We have higher taxes and just a general higher cost of living in California.”

The Golden State also has the most drivers and must import fuel from out of state or overseas, she added.

California’s fuel prices are historically elevated during the summer, when the state requires a special blend that adds about 20 cents to 25 cents per gallon.

The state also adds a federal excise tax, 27 cents a gallon for the state’s cap-and-trade program, a low-carbon fuel tax of 11 cents per gallon, about 2 cents for underground gas storage fees, and another 3.7 percent in state and local taxes.

Despite the higher tax, California’s gas prices were 16 cents lower a gallon Monday compared to the same day last year and 4 cents down from a week ago, AAA reported.

Although the official numbers are not yet in, the drop in gas prices over last year was good news for drivers, Ms. Venegas said.

“It’s already good news that we’re paying less than a year ago,” she said. “It’s a good thing.”