Two statewide changes could cause gas prices to rise across California starting July 1, but it’s not clear exactly how high those prices may rise, sparking a heated political debate.
First, the state’s excise tax rate will increase from 59.6 cents to 61.2 cents per gallon.
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WATCH HEREThe uncertainty lies more, though, with the state's environmental regulation program called the Low Carbon Fuel Standard.
In November, the California Air Resources Board voted to strengthen the program, which functions as a sort of cap-and-trade program, incentivizing oil and gas companies to cut emissions and requiring those that don’t to buy credits from the ones that do.
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SIGN UP “That's going to increase their costs, which will again get passed on to the consumers, and all of us will be paying more for gasoline,” said State Senate Minority Leader Brian Jones (R-San Diego).
Exactly how much more isn’t all that clear. Jones cited a study from the University of Pennsylvania that said gas prices could go up by as much as 65 cents per gallon in the near term.
That study noted, whoever, that figure is an “upper-bound estimate,” adding that the impact is “fundamentally uncertain and could easily be lower.”
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“I think there’s been a lot of hyperbole around gas price impacts from the program, in part because they are hard to forecast,” said Sam Wade of the Coalition for Renewable Natural Gas (CARB). “Just as it's difficult to forecast where oil prices might go, it's difficult to forecast where the credit prices in the system might end up.”
“The changes are really just to try and get more clean air and more greenhouse gas reductions out of the fuels that we use in the state, so if you're in favor of avoiding climate damages like major wildfires and breathing cleaner air in our communities, then you should support the program,” Wade said.
CARB pointed to a different estimate from the University of California-Davis that found pass-through costs could range from an additional 5-8 cents per gallon.
“Any additional cost at the pump,” CARB said in a statement, “would be from oil companies passing through the cost of complying with the regulation and they would decide how much, if any, of that cost to pass through to consumers.”
Jones maintained that any increase is too high when California already has the highest gas prices in the U.S., according to AAA.
“Their mission is to drive up the price of gasoline so high that regular, everyday Californians like you and me are forced into EVs, public transit or bicycles,” Jones said of CARB.
“California has done so much to protect the environment, reduce emissions,” he added. “I mean, don't you think we've jumped the shark on that one?”
Wade said the program is not the main driver of fuel prices relative to other factors like the cost of oil.
“It's a small cost compared to the benefits that you receive from an environmental perspective,” Wade added.
