California motorists are set to incur higher costs at the pump beginning Wednesday, as a new gas tax increase comes into effect. This move has prompted a group of the state's Republican legislators to caution that the additional expenses will further strain residents already grappling with some of the nation's most expensive fuel.
The state's Republican congressional delegation, led by Representative David Valadao, is advocating for Governor Gavin Newsom to halt the scheduled 2.2-cent-per-gallon increase. This adjustment will elevate California's excise gas tax to 63.4 cents per gallon.
Lawmakers noted that this figure does not encompass the state's sales tax and other local charges, which collectively contribute approximately $1.15 per gallon to the total surcharge burden at California fuel stations.
In a letter dispatched to Governor Newsom on Friday, the legislators stated, "According to AAA, the average price of gasoline in California is currently $5.58 per gallon—the highest in the nation and $1.65 above the national average." They continued, "Instead of further unaffordable increases to California’s gasoline excise tax, we urge you to prioritize commonsense energy policies that will provide meaningful relief for all Californians."
Of the average $5.58 per gallon price cited by the lawmakers, approximately $4.43 accounts for the cost of the gasoline itself, with the remaining portion allocated to various taxes and fees.
Other California Republican Representatives, including James Gallagher, Tom McClintock, Vince Fong, Jay Obernolte, Young Kim, Ken Calvert, Darrell Issa, and Kevin Kiley, I-Calif., also endorsed the letter.
California's Rising Fuel Costs Spark Legislative Opposition
Representative Valadao has consistently pressed Governor Newsom in recent years to suspend California's gasoline excise tax increases, which are tied to inflation and adjust annually.
This policy originated from a 2017 California transportation law that raised the state's fuel taxes to help finance road, highway, and transit infrastructure projects. A ballot measure in 2018 aimed at repealing this law was rejected by voters, thereby allowing the annual excise tax increases to continue.
Governor Newsom Defends State's Fiscal and Environmental Stance
Governor Newsom has resisted calls to eliminate the fuel tax hikes, asserting that a temporary gas tax holiday or a repeal effort would jeopardize the state's essential road repair programs. He has also attributed rising fuel prices to former President Donald Trump's actions concerning Iran. Furthermore, Newsom has dismissed the notion that suspending these taxes would lead to lower prices for consumers at the pump.
"Repealing gas taxes wouldn’t lower prices at the pump — it would hand oil companies a massive tax break with no guarantee that a single cent would be passed on to drivers," Governor Newsom’s office stated in a March press release.
State Energy Policies and Refinery Closures
Republicans have been vocal in their criticism of Governor Newsom, arguing that his administration's policies have contributed to elevated energy costs within the state, consequently increasing the expense of daily living.
This year, two significant California oil refineries, operated by Valero and Phillips 66, ceased operations. These closures were partly attributed to the adoption of stringent climate regulations and fuel standards that reportedly undermined the economic viability of their activities. A reduction in the state's fuel-making capacity necessitates purchasing more crude oil and gasoline from outside California, often from international sources at a higher price.
Given California's lack of pipeline connections to major domestic oil-producing regions, it imports roughly three-fourths of its crude oil, while local production continues to decline. Approximately one-third of these imported barrels originate from the Middle East, making the state particularly susceptible to fuel price surges, especially when geopolitical events, such as conflicts involving Iran, disrupt shipping through key routes like the Strait of Hormuz.
Chevron relocated its headquarters to Houston in 2024, concluding more than 140 years of operation in California. This decision was linked to Texas's more business-friendly corporate environment and California's assertive environmental policies, which have been cited as factors pushing fossil fuel companies out of the state.
Governor Newsom has also supported an objective for California to cease all oil extraction within the state by 2045.
"It’s past time for Sacramento to stop these harmful price hikes, prioritize domestic energy production, and ease the burden on hardworking Californians instead of adding to it," Representative Valadao commented.
A spokesperson for Governor Newsom did not immediately respond to a request for comment regarding the matter.