Gasoline Tax

State Gas Tax Set to Increase to 53.9 Cents Per Gallon in July


On July 1, California’s excise tax on gasoline will increase from 51.1 cents per gallon to 53.9 cents per gallon, and the tax on diesel fuel will increase from 38.9 cents per gallon to 41 cents per gallon, according to a notice issued this week by the California Department of Tax and Fee Administration.

With the increase, Californians will pay 70.95 cents per gallon at the pump attributable to state and local taxes and fees, which is the highest in the nation. 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 CDTFA, an executive branch agency, is required to adjust the fuel excise taxes on July 1 every year to reflect the 12-month change in the California Consumer Price Index. The pending rate increase for 2022 reflects the 12-month change in the California CPI from November 1, 2020, to November 1, 2021.

Although public interest in the gas tax is strong, the CDTFA chose not to issue a news release or social media announcement to notify the public of the increase, instead posting the information in the “Notices and Notifications” section of its website under the heading of “Tax Rates for Motor Vehicle and Diesel Fuels.”

The Senate Governance and Finance Committee this week rejected SB 1156 (Grove), which proposed to eliminate the annual inflation adjustment for the gasoline and diesel fuel excise tax rates, effective July 1. The bill deadlocked on a 2-2 vote, with Senators Anna Caballero and Jim Nielsen in support, and Senators Maria Elena Durazo and Scott Wiener opposed. The potential tiebreaker, Senator Robert Hertzberg, did not vote.