While California drivers have been enjoying the recent drop in gas prices due to slumping global oil costs, you might be surprised to learn that only Hawaii has higher fuel prices. According to the AAA Fuel Gauge Report, the national average is currently around $1.71 per gallon while the California average is nearly 60 cents higher at $2.32 a gallon.
This leaves Californians asking the simple question: why?
For my district, finding an answer is particularly important. Every day, nearly 100,000 commuters leave my community in the Antelope Valley to work in Los Angeles, which can be longer than 150 miles roundtrip. This same story is common in communities across the state. For these families, gas is one of their largest monthly expenses—even during times of low prices like we fortunately have now.
There is no doubt gasoline prices are notoriously unstable and depend on a variety of factors. The global oil market, bottlenecks at fuel refineries, and other variables all play major roles in affecting gas prices in our state, but it is difficult to understand just how much.
We do know that beginning in 2015 that we became the first state to require gasoline and diesel fuel suppliers to purchase emission credits under the California’s Cap and Trade Program.
Drivers deserve to know how much this new requirement is adding to their monthly gas budget, which is why I have introduced Assembly Bill (AB) 2066. The bill would simply require that an estimate of the cost of Cap and Trade be printed on signs at gas stations where federal and state excise taxes and fees are already displayed for motorists.
Coming up with an accurate estimate is feasible using data from the Cap and Trade auctions. The non-partisan Legislative Analyst’s Office projected it would add 13 to 20 cents per gallon to prices by 2020, while a February meeting of the California Energy Commission estimated that it is increasing current prices by about 10 cents.
Providing this information will shed some light on why drivers in California are paying higher prices than the rest of the country.
Consumer transparency is certainly not a new concept. For example, if you look at your electricity bill there is a detailed breakdown of the various taxes and fees you are paying. The same is true for countless other things consumers purchase every day. Not only does it show where the money is going, but it helps keep government accountable because the public can clearly see when there are increases.
AB 2066 will help make gas pricing more transparent and give Californians a better understanding of what is driving our state’s higher prices. This is a great opportunity to show that the Legislature is looking out for consumers.