Sacramento, California, is facing a significant debate over its high gas prices. A recent study from the USC Marshall School of Business claims that California’s soaring gas prices are primarily due to state regulations and taxes, rather than price gouging by oil companies. This conclusion challenges the narrative pushed by Governor Gavin Newsom and state lawmakers, who have often pointed fingers at corporate greed.
The research indicates that California has the highest costs associated with gasoline in the country. According to Michael Mische, the researcher behind the study, various taxes and fees add about $1.63 to the price of each gallon sold. These include underground tank storage fees, local and state taxes, and costs related to California’s unique fuel blend and environmental programs. The report suggests that these costs significantly contribute to the price gap between California and the national average, which is nearly $2 less per gallon.
Mische also noted that California’s high excise taxes mean the state profits much more than retailers do on each gallon of gas sold. In fact, recent reports from the California Energy Commission show that many refineries have been losing money on their gas sales for several months. This raises questions about the true nature of price gouging in the state.
The situation is further complicated by California’s strict environmental regulations and plans to phase out internal combustion engine vehicles by 2035. Critics argue that these policies discourage refiners from expanding their operations, which could help stabilize gas prices.
In a related move, Attorney General Rob Bonta has filed a lawsuit against major oil companies, claiming they have misled the public about climate change and its connection to fossil fuel use. Meanwhile, the California Air Resources Board is working on a new Low Carbon Fuels Standard, which could potentially increase gas prices by an estimated 65 cents per gallon.
Despite these findings, some advocates continue to blame a so-called "mystery gas surcharge" for the state’s price issues. However, experts argue that the real reasons for California’s high gas prices are clear: excessive regulations, high taxes, and a dwindling supply of refineries.
As the debate continues, it remains to be seen how lawmakers will respond to the findings of this study and whether any changes will be made to address the rising costs for consumers. For now, it seems that the conversation around California’s gas prices is far from over.