California’s Gas Tax Just Went Up. So Has The Bickering.

July 5, 2024

San Diego Union Tribune

Severin Borenstein, Energy Institute Faculty Director, examines California’s gas tax and the disputes surrounding it.

“Severin Borenstein calls it a ‘mystery surcharge’ that to 2015 when an explosion at an Exxon Mobil refinery in Torrance knocked off about 10 percent of the state’s gasoline supply, driving up prices. After normal operations resumed, prices went down modestly but never returned to their pre-explosion margins. Even after taking California’s high taxes and fees into account, Borenstein’s data show a ‘mystery surcharge’ that has hovered around 35 cents per gallon since the Torrance explosion. That differential has been passed onto drivers in the state to the tune of $50 billion, by Borenstein’s estimation. ‘I have investigated all the obvious candidates — cap and trade, the Low Carbon Fuel Standard and the cost of producing our cleaner burning gasoline — and none of those explain it… It’s a problem. There may be a benign explanation but it’s definitely not an obvious benign explanation.'”