Feeling the pain of gasoline prices? In California the average price of gasoline is about $4.20 a gallon. That’s second highest in the nation behind Hawaii. Some of the recent jump in state gas cost can be attributed to refinery troubles. But California also leads the nation in taxing gasoline.
According to a chart prepared by energy giant Exxon Mobil earlier this year, California is the only state with combined state, local and federal tax that tops 70-cents a gallon.
Of course, some in the Golden State think that is not enough. Efforts to create an oil severance tax would add to the cost of gasoline, perhaps even vaulting the per gallon price of gas past Hawaii, which has the extra burden of importing its oil.
Exxon Mobil’s blog claims that in 2013 for every gallon of gasoline and other products refined, shipped, and sold in the United States the company earned a 5.5 cent profit. The blog notes that compares to 40 to 60 cents per gallon collected by the federal, state, and local governments in gasoline taxes in most states — higher in California.
Meanwhile, there was a tidbit of positive energy related news on the cost of driving in Dan Morain’s Sacramento Bee column yesterday. Morain reported that the giant electric car battery plant Tesla Motors is seeking just might end up in California after all. The company, which is headquartered here and has benefited from multiple state subsidies and benefits that encouraged the company’s growth, had previously announced a list of western states that might be home to the factory. California was not among them. Beyond the push for electric cars, this news involves the important issue of a potential 6500 jobs for the state.
I criticized Tesla’s earlier stance on factory location on this site last month. As I wrote at the time, California seemed to meet the requirements Tesla was looking for in establishing its factory, with the exception of the ease of acquiring environmental permits. “Ironic, if the permitting is the hurdle that convinced Tesla to look elsewhere since this is a car company that lives on its reputation as an environmentally friendly product and survives because of its ability to sell pollution credits,” I wrote then.
Perhaps, Tesla was feeling the heat from California politicians who have passed laws and regulations beneficial to the company. But there are a couple of lessons to be learned here as to the cost of driving and doing business in California.
The state’s heavy tax burden on gasoline drives up the cost of living and working in the state for all it’s businesses and residents. The state’s heavy cost of doing business potentially drives away even favored companies. Politicians take note.