California Gas Prices: Newsom's Policies, Taxes, and Refinery Impact

High Gas Prices in California

• 💡 California residents face sticker shock with gas prices ranging from $4.70 to $7 per gallon, significantly higher than the national average of $2.60-$3.
• 💸 Many Californians, including those working multiple jobs or self-employed, find it demoralizing and unaffordable, forcing them to budget extensively for fuel.
• 💰 Some individuals report spending up to $800 a month on gas, highlighting the severe financial toll on households and businesses.

Impact of Newsom's Policies

• 📈 USC Professor Michael Mische states that under the Newsom administration, gas prices in California have increased by nearly 35%.
• 📉 The number of drilling permits has declined by 97%, contributing to reduced oil supply within the state.
• ❌ Professor Mische's 50-year study found no economic evidence of price gouging by refiners or producers, contradicting the governor's public statements.

Refinery Closures and Supply Issues

• 🏭 Several refineries, including Philip 66 and Valero, are exiting California, citing a "hostile environment" and operating costs 35-38% higher than other states.
• ⚠️ The state has seen a reduction from over 40 refineries to just eight (soon seven), leading to a 20% drop in production.
• 🚧 The Crimson Pipeline, a critical North-South artery, is at risk of becoming economically unviable and potentially shutting down by March 2026, further jeopardizing supply.

Taxes and Regulatory Burden

• 💲 Of a $5.19 gallon of gas, $1.44 is attributed to California taxes and regulatory fees, making up a substantial portion of the consumer price.
• 📊 The state collects 60 cents per gallon in taxes, significantly more than the 8-12 cents earned by gas station owners.
• 💡 California's state excise tax is the highest in the country, contributing to the elevated prices compared to other states.

Critique of SB237 and Cap & Trade

• ⚖️ Professor Mische argues that SB237, intended to streamline drilling in Kern County, is "too little, too late" and will not provide enough oil to meet demand or keep the Crimson Pipeline operable.
• 💨 The Cap and Trade program, a key climate change strategy, adds considerable cost to gasoline and is viewed by the California Legislative Analyst Office (LAO) as essentially another tax.
• 🚄 A significant portion (25%) of Cap and Trade revenue is allocated to the California high-speed rail project, which Mische refers to as the "train to nowhere."