New Taxes Threaten To Spike Gas Prices By 47 Cents And It’s Just The Beginning For Californians

Gavin NewsomPhoto bySheilaf2002/Depositphotos

California’s gas prices, already among the highest in the nation, are poised to climb nearly 50 cents per gallon due to a lesser-known initiative designed to fulfill the state’s stringent emissions reduction targets.

The governing entity, the California Air Resources Board (CARB), is tasked with executing the most rigorous climate policies globally, aiming for carbon neutrality by 2045.

Already Facing High Gas Prices

Californians are no strangers to steep gas prices, consistently among the highest in the country. As of Monday, according to AAA, the average price for a gallon of regular unleaded was $5.28, significantly higher than the national average of $3.61.

Newsom Blames Oil Industry

The disparity between California’s retail gasoline prices, known for being exorbitant, and those of the rest of the nation had widened. While the oil industry attributes this to higher taxes and regulations in the state, Newsom contends that companies are exploiting global shortages for profit.

After a six-month, highly publicized standoff with the oil industry, Gov. Gavin Newsom accused oil companies of gouging Californians during last year’s record gas price surge and pushed for legislation to reclaim excessive profits for taxpayers. On March 23rd, 2023 he celebrated the signing of a pioneering law that may cap oil refiner earnings.

“We proved we can actually beat Big Oil,” Newsom said.

California’s Refinery Count Plummets from 43 to 14

At a recent Senate energy committee hearing, Catherine Reheis-Boyd, the president and CEO of the Western States Petroleum Association, argued against caps and penalties on oil profits, claiming they would not lower prices but would instead have the opposite effect.

She explained that to avoid penalties, companies might limit supply, pushing prices even higher. “Running a refinery in California is two to three times more expensive than anywhere else in the world, reaching a point where it’s no longer economically viable,” Reheis-Boyd stated.

In 2023, California’s number of refineries had dropped to 14 from 43 in 1982. She suggested that lawmakers should focus on enhancing the oil supply chain by easing restrictions on crude oil production within the state.

Gas Tax Hike July 1, 2024

While Californians await the CARB increase, they will already face increased gas prices starting July 1 when the built-in excise gas tax will now be 59.6c/gallon to account for inflation.

Already Paying For Expensive Summer Blend

The average gas price in the state has risen 55 cents from last year as the pricier summer blend takes effect. Gas stations across California have begun selling the pricier summer fuel blend, designed to cut down on ozone emissions, with Southern California making the switch on February 1 and Northern California following on March 1, as reported by the energy commission.

Low Carbon Fuel Standard Report Forecasts Hikes Next Year

In an updated version of CARB’s Low Carbon Fuel Standard, a recent report revealed potential cost implications for consumers as the state advances its clean air objectives.

This report forecasts that, starting next year, gasoline prices could rise by an average of 47 cents per gallon, with expected similar annual increments following.

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

Republican State Senators Criticize Tax Increases

State Sen. Janet Nguyen (R-Huntington Beach), a staunch opponent of tax increases, has slammed the proposed hike as a “secret” tax that would severely strain Californians financially. “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.”

CARB Claims Price Increases Are Not a Tax

In response to claims of a “secret” gas tax, CARB told KTVU that the figures cited in the preliminary report were “intended to provide a range of financial possibilities looking at how various Low Carbon Fuel Standards (LCFS) credit prices might be passed through to Californians by industry.”

Dave Clegern, a CARB Public Information Officer, clarified, “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.”

In a December report, the air board staff described the earlier gas price hike projections as “incomplete,” choosing instead to highlight the potential cost savings for drivers as the transition to electric vehicles (EVs) gains momentum.

100% Push Towards Electric Vehicles In a Decade

Last August, the California Air Resources Board set a groundbreaking mandate that requires 35% of new cars sold in the state by 2026 to be zero-emission vehicles, nearly doubling current figures, with targets increasing to 68% by 2030, and 100% by 2035.

Biden Adopting California Model

California, a major influencer in the U.S. auto market where one in every ten cars is sold, has seen at least 17 other states commit to adopting its regulations.

This move places substantial pressure on automakers, especially as the Biden administration recently proposed similar stringent national measures to boost electric vehicle production.

Costly and Challenging Transition to Electric Vehicles

Transitioning from gasoline-powered vehicles to electric vehicles (EVs) presents significant financial and logistical challenges. The initial cost of purchasing an EV can be substantially higher compared to traditional vehicles, putting a strain on many household budgets.

Additionally, the development of EV charging infrastructure remains uneven, with multi-unit dwellings often lacking the necessary installations. This scarcity of accessible charging stations creates a significant barrier for apartment dwellers and those without private garages, complicating the shift towards a more sustainable mode of transportation and making it less practical for a significant portion of the population.

Biden Quadruples Tariffs On Chinese EVs

Chinese firms can sell EVs for as little as $12,000.

Joe Biden today announced anti-China tariffs under the guise of protecting American workers expanding on the tariffs first instituted by Trump in 2018.

The tariffs announced on EVs increases from 25% to 100%. EV battery tariffs jumped 33% from 7.5% to 25% while solar cells doubled from 25% to 50%.

Karoline Leavitt, the Trump campaign’s press secretary, called the new tariffs a “weak and futile attempt” to distract from Biden’s own support for EVs in the United States, which Trump says will lead to layoffs at auto factories.

Concerned about a potential influx of affordable Chinese cars manufactured in Mexico, former President Trump and his team are strategizing to enforce significant tariffs on automobiles from Mexico unless it ceases the importation of Chinese-manufactured electric vehicles into the United States, as disclosed by federal legislators and three former officials from the Trump administration familiar with his intentions.

Californians Bear the Brunt of Conflicting Climate Policies and Politics

As California’s gas prices, already among the nation’s highest, face an impending surge of nearly 50 cents per gallon due to lesser-known initiatives aimed at fulfilling stringent emissions targets, residents grapple with the financial strain. Governor Newsom’s ongoing battles with the oil industry, coupled with the looming threat of gas tax hikes and soaring EV mandates, underscore the mounting challenges. Critics argue that these policies, driven by Newsom and echoed at the federal level by President Biden, are leading Californians into a financial abyss, with skyrocketing costs and insufficient infrastructure for the transition to electric vehicles exacerbating the burden.

The original post appeared on Financial Freedom Countdown and has been syndicated.