Call for New Tax on Oil Will Hurt Drivers

For Immediate Release, September 30, 2022
Contact: David Kline (916) 893-2614 or
[email protected]

Today, Governor Gavin Newsom called for a new tax on oil and gas production that will further drive up the cost of gasoline, making it more expensive for most California motorists.

“California’s high taxes are part of the problem for motorists, not the solution,” CalTax President Robert Gutierrez said. “Another tax increase that makes the production process more expensive would result in even higher prices for drivers.”

Californians already pay the highest gas taxes in the United States.

Costs at the pump include 70.95 cents per gallon for state and local taxes and fees. According to the nonpartisan Legislative Analyst’s Office, California’s cap-and-trade auction increases the price of gasoline by an additional 23 cents per gallon. The federal excise tax on gasoline adds another 18.4 cents per gallon to the cost at the pump.

The governor’s call for new taxes comes three months after the state increased the excise tax on gasoline from 51.1 cents per gallon to 53.9 cents per gallon.

While California debated gas tax relief earlier this year, no reductions were made to the motor vehicle fuel tax rates. Instead, the recently enacted 2022-23 state budget includes a 12-month pause in the state diesel fuel tax (3.9375 percent), beginning October 1, 2022. Also, the state is scheduled to issue payments to residents to offset higher fuel costs in the next several weeks.