California’s Unique Gas: We all pay more at the pump
California’s gas prices are the third highest in the nation, hovering around the $3.00 per gallon mark at the end of October. The average price of gas over the past three weeks for all 50 states was closer to $2.60 per gallon. So why are gas prices so much higher in California? To begin with, California charges the highest gasoline taxes in the nation. California even collects a tax on a tax by charging sales taxes on the state and federal excise tax!
In California, taxes on fuel account for roughly 65 cents per gallon, which includes the state sales tax rate of 8.25%, plus 1.2 cents per gallon for Underground Storage Tank (UST) fees, plus additional local sales taxes where applicable. In Sacramento County, sales taxes are 8.75%.
We also pay more in California because of stringent environmental laws dictating that we use reformulated gasoline, which can only be supplied by a limited number of refineries. So when one of them shuts down, as the Tesoro refinery in Los Angeles did earlier this year due to a fire, the supply is reduced enough that prices inevitably rise.
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