Why is gas so expensive in California?

Originally published: March 20, 2025

This is the first post in a 5-part series about how to fix California’s energy problems. Today’s topic: How California is inflating gasoline prices.

Why do we in California pay $1.50–$2.00 more for gas than other states?

It’s simple: anti-freedom, anti-fossil-fuel policies:
1) High excise taxes
2) Cap-and-trade carbon tax
3) Reformulated Gasoline mandate
4) Low Carbon Fuel Standard
5) “Summer Blend” fuel requirements

• 1. CA’s excise tax on gasoline adds $0.60 per gallon to the price of gasoline.

  Why: The excise tax is a direct per-gallon tax on gasoline, which is added at the pump and passed directly to consumers.¹

• 2. CA’s “cap-and-trade” carbon tax adds $0.27 per gallon to the price of gasoline.

  Why: The “cap-and-trade” program forces fuel suppliers to buy emissions allowances for every gallon of gas they sell. That extra cost is ultimately passed to consumers.²

• 3. CA’s Reformulated Gasoline mandate adds 10-15 cents per gallon to the price of gasoline.

  Why: The California Reformulated Gasoline mandate requires the production and use of a unique blend of gasoline subject to strict requirements, making it more expensive to refine.³

• 4. CA’s Low Carbon Fuel Standard is projected to add $0.37 per gallon to the price of gasoline in the near term—and $1.15 by 2046!

  Why: Low Carbon Fuel Standard forces fuel producers to buy credits to offset their fuel's carbon intensity, driving up costs that are ultimately passed to consumers.⁴

• 5. CA’s “Summer Blend” fuel requirements add up to $0.15 per gallon to the price of gasoline during warmer months.

  Why: The “Summer Blend” requires refiners to use a costly, low-volatility formula that is more expensive to refine and distribute, leading to higher fuel prices.⁵

• The solution to California's gas prices is obvious: eliminate the 5 anti-fossil-fuel, anti-freedom policies that make prices so high.

  Unfortunately, Governor Gavin Newsom wants to keep these policies and then scapegoat oil companies: “They've been fleecing you for decades and decades.”

• Californians, unite: tell Governor Gavin Newsom and other California officials to make driving affordable again by eliminating high excise taxes, the “cap-and-trade” carbon tax, the “Reformulated Gasoline” mandate, the “Low Carbon Fuel Standard,” and “Summer Blend” fuel requirements.

Michelle Hung, Daniil Gorbatenko, and Steffen Henne contributed to this piece.

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