Highway Robbery: California’s Gas Tax Jumps another 2.2 Cents July 1st
‘Like clockwork, we’re facing another tax increase on Californians’
By Katy Grimes, June 25, 2026 7:00 am
Gird your loins: While gas prices are going down throughout the country, California is increasing its gas tax. July 1, 2026, California’s state excise tax on gasoline increases to 63.4 cents per gallon, up from 61.2 cents, affirming the state’s highest-in-the nation gas taxes.
More is never enough.
On top of the excise tax, Californians pay roughly 13 cents in state and local sales taxes, about 24 cents for cap-and-trade, roughly 20 cents for the Low Carbon Fuel Standard and another 2 cents for the underground storage tank fee.
California Energy Commission lists the other taxes:
- State and local sales taxes: Roughly 13 cents per gallon (based on an average ~2.25% state sales tax plus local add-ons applied to the fuel price; the exact amount varies by location).
- Cap-and-Trade (Cap-and-Invest): About 24–25 cents per gallon (this fluctuates with allowance prices; recent estimates put it in the 24–27 cent range).
- Low Carbon Fuel Standard (LCFS): Roughly 17–20 cents per gallon (varies with compliance costs and credit prices; estimates have ranged from ~14–20+ cents recently).
- Underground Storage Tank (UST) fee: 2 cents per gallon (a fixed fee for cleaning up leaking tanks)
These add up to roughly 56–60+ cents per gallon in additional state-level costs beyond the base excise tax, according to the Tax Foundation. Combined with the federal excise tax of 18.4 cents/gallon, California’s total tax and regulatory burdens is the highest in the U.S. about 80–90+ cents per gallon total when including everything.
The gas tax increase is automatic under Senate Bill 1, the 2017 law that raises the tax every year without a vote of the Legislature, Assembly Republicans note.
“When SB 1 passed, California’s gas tax was 27.8 cents per gallon. In less than a decade, it has more than doubled and will continue increasing automatically every July.”
“Like clockwork, we’re facing another tax increase on Californians,” said Assembly Republican Leader Heath Flora (R-Lodi). “Families are already paying some of the highest gas prices in the country. Instead of raising taxes, we should be trying to make gas more affordable.”
Altogether, state taxes, fees and mandates add about $1.38 to every gallon of gas sold in California, costing the average driver hundreds of dollars each year. That’s before accounting for global supply and demand or state policies that have contributed to refinery closures and reduced in-state fuel production.
The Western States Petroleum Association has its own listing of California’s Estimated Impact of California Taxes, Fees & Costs of Climate Programs, which will go up July 1st:
“California’s energy affordability crisis is a choice. Assembly Republicans have repeatedly fought to suspend the gas tax and provide relief to working families,” Assembly Republicans report.
“Sacramento Democrats chose higher taxes. On July 1, Californians will pay the bill.”
A California native and Navy mom, Katy lives in Sacramento, CA.
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