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California gas tax increases again on Monday

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Posted at 7:35 PM, Jun 30, 2024

SAN DIEGO (KGTV) — Gas prices in San Diego County have dropped about 25 cents over the past month, but starting Monday, a higher tax will slightly increase costs.

As of this weekend, the average price for a gallon of gas in San Diego is $4.82. Currently, each gallon includes an additional 58 cents from the state excise tax. However, beginning July 1, this tax will rise to 60 cents per gallon. So, filling up a 12-gallon tank will cost customers about an extra quarter.

"I don't know what an extra two cents is going to do, but it's probably not gonna stop there," said Joe Silverman, an economics professor in the San Diego area. "We've kind of taken the increase in gas prices over the last couple of years from $4 to $5 per gallon pretty calmly."

According to data from the California Energy Commission, starting Monday, drivers will be paying 90 cents in taxes per gallon of gas, broken down as follows:

  • $0.60 on state excise tax
  • $0.18 on the federal excise tax
  • $0.10 cents on more state and local sales taxes
  • $0.02 for a state underground storage tank fee

"This is just way over government regulation, and now is not the time," San Diego County Supervisor Jim Desmond said at a news conference in March, hoping to stop the increase from being implemented.

Desmond said the state is already too expensive. However, Governor Gavin Newsom blamed high prices on oil companies.

In an interview with Fox News following the second Republican Presidential Debate in September, Newsom said Californians are being gouged by oil companies.

Silverman questions this narrative. He wonders if the state's push for zero-emission vehicles by 2035 could be influencing prices.

"If you're the CEO of an oil company, you have to be charging more in order to make up for the possibility that you may not be in business anymore in California," he said. "If this mandate for no more gasoline-powered cars goes into effect in 2035 or sometime thereafter, there won't be a need for any gasoline because people will be transitioning."

In neighboring Arizona, the average gas price is $1.23 cheaper than in California, according to AAA. But Arizona pays just 53 cents less in state excise tax.

Silverman said there are a number of other variables that go into California's high gas prices, beyond taxes.

"We're sort of in what we call a gasoline island, meaning that we can't just get gasoline from Texas or another state because it's got to be formulated in order to meet the different air pollution requirements of different parts of the state," he said.

A report released by the state last year found funding from gas taxes will drop by almost $6 billion over the next 10 years. According to Caltrans, the state excise tax funds 80% of highway and road repairs.