California, October 13, 2025
News Summary
California is set to increase its gas tax by 1.6 cents per gallon starting July 1, along with stricter air quality regulations that could add up to 8 cents more. This change raises the gas tax to approximately 61.2 cents per gallon, currently the highest in the nation. Despite a decline in gas prices compared to last year, there are concerns about the future trajectory of gasoline costs in the state, especially amidst geopolitical tensions and regulatory changes aimed at promoting environmental sustainability.
California is set to experience an increase in gas prices starting July 1, due to an annual tax adjustment and stricter air quality regulations. The state’s gas tax will rise by 1.6 cents per gallon, adding to what is already the highest gas tax rate in the country, which stands at approximately 59 cents per gallon. With this adjustment, the tax is expected to increase to 61.2 cents per gallon, while the tax on diesel fuel will rise from 45.4 to 46.6 cents per gallon.
According to Governor Gavin Newsom’s office, the new air quality regulations will likely add an estimated 5 to 8 cents per gallon to gas prices. In the Los Angeles – Long Beach area, the current average price for a gallon of regular unleaded gasoline is $4.61, which marks a decline of 18 cents compared to last year. However, concerns remain regarding the overall trend in gas prices.
Misinformation has circulated that suggests gas prices could soar to $8 per gallon by 2026; however, this claim has been debunked by Newsom’s office. The increase in taxes and regulations comes at a time when California’s gas prices are approximately 20 cents per gallon lower than they were last year, providing slight relief for consumers as the summer holiday season approaches.
The average household in California pays over $600 per year in total gas taxes. Caltrans reports that gas-powered vehicles in the state contribute about $300 a year in state gas taxes. With rising popularity of zero-emission vehicles, legislative analysts predict that gas tax revenue may fall by $5 billion, or 64%, by 2035. The state is planning to transition away from gas taxes toward a California Road Charge, which would bill drivers based on mileage driven instead of gallons used. A pilot program to test this road charge was initiated in August 2024 and concluded in January, with the results expected later this year.
Motor fuel taxes play a critical role in funding transportation revenue, though their contribution has diminished from 41% in the fiscal year 2016 to approximately 36% in the fiscal year 2024. Both California and Oregon have set ambitious targets to make all new passenger cars sold zero-emission vehicles by 2035. In addition, the California Air Resources Board (CARB) approved amendments to the Low Carbon Fuel Standard program in 2024, which are anticipated to promote lower-carbon fuels but may cause cost increases at the pump.
Initial estimates indicated that previous amendments to the Low Carbon Fuel Standard could raise gasoline prices by an additional 47 cents per gallon, though this prediction has since been revised downward. Upcoming price increases are also linked to fluctuating global oil prices, which are influenced by various geopolitical tensions and domestic supply changes.
As the state braces for the tax increase, consumers may need to adjust their budgets accordingly. The ongoing transformation in the fuel sector aims not only to address environmental concerns but also to prepare for a future where electric and alternative-fuel vehicles become more commonplace on the roads.
FAQ
What is the increase in California’s gas tax starting July 1?
Starting July 1, California’s gas tax will increase by 1.6 cents per gallon.
What will the total gas tax rate be after the increase?
The total gas tax rate in California is expected to increase from about 59 cents per gallon to 61.2 cents per gallon.
How much do average households in California pay in gas taxes annually?
Total gas taxes in California exceed $600 per year for the average household.
What are the current average gas prices in the Los Angeles – Long Beach area?
The average price for a gallon of regular unleaded in the Los Angeles – Long Beach area is currently $4.61.
What are the impacts of stricter air quality regulations on gas prices?
Stricter air quality regulations are expected to add an estimated 5 to 8 cents per gallon to gas prices.
| Feature | Details |
|---|---|
| New Gas Tax Increase | 1.6 cents per gallon from July 1 |
| Total Gas Tax Rate | Expected to reach 61.2 cents per gallon |
| Annual Gas Tax Cost for Households | Exceeds $600 |
| Current Average Gas Price | $4.61 in Los Angeles – Long Beach area |
| Estimated Impact of Regulations | 5 to 8 cents increase per gallon |
Deeper Dive: News & Info About This Topic
- ABC7 News
- Los Angeles Times
- NBC Los Angeles
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- KTLA News
- Wikipedia: California
- Google Search: California gas prices
- Google Scholar: California gas tax
- Encyclopedia Britannica: California gas
- Google News: California gas tax increase
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
