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California Fuel Costs To Rise In January Due to “Hidden Gas Tax”


Businesses and consumers in California are concerned about what some are calling a “hidden gas tax” that could take effect in 2015.

California drivers already pay the highest prices for fuel and the second highest fuel taxes in the country – 68.1 cents, second only to New York’s 68.9 cents per gallon.

In January, California’s tax on fuel will likely to go up again to pay for a first-in-the-nation climate change law, most likely pushing the cost of unleaded to $4.65 a gallon. The increase would be a result of a 2006 bill named AB 32, which requires California to reduce greenhouse gas emissions to 1990 levels by the year 2020.

The tax on carbon has already raised about $1 billion in revenue by requiring manufacturers and utilities to buy credits for each ton of carbon emitted into the atmosphere.

Starting Jan. 1, the law will also apply to oil and gas, requiring oil refineries to pay for the right to release carbon and greenhouse gases into the atmosphere. Refineries and distributors say they will have to pass the resulting $2 billion in costs on to the consumers.

It is going to affect anyone who has a vehicle,”  California Independent Oil and Marketing Association spokesman Mike Rohrer told Fox News.

“Be it a motorist that is commuting back and forth to work or a trucker just moving goods throughout the state of California, the cost is immediately going to increase because whatever we have to pay for in carbon credits ultimately we have to pass through to the consumer,” he said. 

According to the California Air Resources Board (CARB), whose programs address all major sources of greenhouse gas emissions, the tax is a cost for the fuel industry, not necessarily the consumer.

“How each company decides that it will accommodate that additional cost into their business plan is entirely up to them,” said CARB spokesperson Stanley Young. 

For many Californians, any possibility of increased fuel costs is not good news. Many groups are lobbying to stop the hidden gas tax, including the grassroots coalition Fed Up at the Pump.

“CARB hopes high gas prices will make us drive less and reduce our greenhouse gas emissions,” said Fed Up member Chris McGlothlin.

“That’s just not a viable option for the agriculture industry in the Central Valley. We still have to drive equipment to our fields and our trucks to town to buy parts, and to deliver the commodities we produce,” he said.

CARB officials say that programs under AB 32 will help move California away from its dependence of gasoline, and help spur the state onto alternative and cheaper fuel.

The money generated by the program, they say, will help fund incentives toward electric cars and public transportation, with a portion of it going to assist some of California’s disadvantaged communities.


Fox News

Business Wire

LA Times

ABC-10 News


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