Facts per Gallon

Why is gas
more expensive
in California?

Many factors impact the cost
of gasoline in the state.

The government collects a lot

According to the California Energy Commission, in July this year government taxes and fees cost 9 times more than what oil companies made in net profits.

The California
Government Collected



The Federal
Government Collected



Oil Companies



SOURCE: Volume-Weighted Gasoline Refining Margin,
California Energy Commission, July 2023

There are many taxes and fees

In July, the $1.26 per gallon in government taxes and fees broke down like this:
SOURCE: California Energy Commission, OPIS West Coast Spot Market Report

Gas shortages and even higher
prices could come soon

The Legislature and Governor passed a new law last year that empowers regulators to set a windfall cap on oil industry profits. The California Energy Commission has begun the work to set that cap. But economists warn this could lead to gas shortages and higher prices.
SOURCE: Professor Michael Mische, USC Marshall School of Business, Report: California’s Profit Gouging Tax, 2023

The Bottom Line: California policies keep adding
to the price of gasoline.

I’m not sure I understand the argument for a windfall profits tax on energy companies. If you reduce profitability, you will discourage investment, which is the opposite of our objectives.

– Lawrence H. Summers, former US Secretary of the Treasury