Overview
- The California Department of Tax and Fee Administration issued a notice on June 2 that the state gasoline excise tax will increase to $0.634 per gallon, taking effect July 1 as an automatic inflation adjustment.
- Governor Gavin Newsom’s press office pushed back against reports that the change was a discretionary ‘hike,’ saying the rise is an annual, voter-approved mechanism rather than a new policy decision.
- Average retail prices in the state remain roughly $6.00 per gallon, keeping pressure on officials as critics say even a 2-cent increase adds strain for working and rural Californians who already pay well above the national average.
- Opponents and some lawmakers are calling for a pause or repeal of the tax and point to state policies, retail markups, and refinery capacity limits as causes of California’s premium, while supporters cite SB 1 funding for roads and infrastructure.
- The increase traces to the 2017 SB 1 law that set a higher base excise and launched annual July 1 inflation adjustments, and it highlights broader debates over how state climate rules, taxes, and market factors combine to affect pump prices.