California gas prices could spike 50 cents under climate offset idea

Drivers react to the rise in gas prices

Industry experts say there are many factors as to why gas prices are creeping up again. One theory is that Saudi Arabia has cut back on the amount of oil it sends to global markets. Others say it has to do with refinery issues and the high level of oil prices. We heard from local drivers who are reacting to the high prices.

SACRAMENTO, Calif. - California’s already high gas prices could see an additional spike of almost 50 cents a gallon tucked inside a little-known draft report aimed at meeting the state’s aggressive emission reduction goal.

The California Air Resources Board (CARB) is the state’s regulating body charged with implementing the most ambitious climate action of any jurisdiction in the world: achieve carbon neutrality by 2045.

An amended version of CARB’s Low Carbon Fuel Standard (LCSF) was released in a preliminary report in September and included potential price pass-throughs for consumers as the state moves toward its clean air goals.

The report projected that by next year, gasoline prices could go up an average of 47 cents per gallon, with similar annual increases thereafter.

"On average, from 2031 through 2046 the proposed amendments are projected to potentially increase the price of gasoline by $1.15 per gallon," the report found.

CARB was set to hold a hearing on the proposed amendments in March but ended up postponing the action until a yet unknown later date, saying it "continues to receive substantial feedback on the proposed regulatory package" and wanted to allow for additional discussion over the proposals.

A vocal critic against tax increases in the Legislature, state Sen. Janet Nguyen (R-Huntington Beach), characterized the proposed hike as a "secret" tax increase, saying it would result in financial hardship for most of the state's residents.

"The astronomical taxes and price of everything from food to gas is driving people out of California. People are putting their rent on credit cards," Nguyen told KTVU, adding. "So what does the state do? It imposes a secret 47-cent fee in addition to the state’s gas tax so now we'll be paying over $6 a gallon."

In a statement to KTVU, CARB disputed any notion of a "secret" gas tax and said that the proposed figures in the preliminary report were "intended to provide a range of financial possibilities looking at how various LCFS credit prices might be passed through to Californians by industry."

CARB Public Information Officer Dave Clegern said, "The LCFS helps drive down the cost of low carbon fuels in California by rewarding low carbon fuel producers with credits that are paid for by dirty fuel producers. This is not a tax and there is no money coming to the state government for this program."

California is facing a gas tax hike, set to kick in on July 1, when the state’s built-in excise gas tax will lead to a two cent increase to 59.6 cents a gallon to adjust for inflation.

It’s no secret that Californians have long paid among the highest gas prices in the nation. On Monday, AAA figures showed the average for a gallon of regular unleaded stood at $5.28. Compare that with the current national average of $3.61.

Editor's Note: A previous version of this story stated the excise tax would go up 59.6 cents a gallon on July 1, instead of indicating the tax would rise from 57.9 cents to 59.6 per gallon. This version has been corrected.