There are billions of dollars missing that are spent on gasoline in California each year
According to Rob Nikolewski of the San Diego Union-Tribune, after taking into account state gas taxes, blending requirements aimed at reducing air pollution and other environmental and climate fees attached to each gallon of fuel, it seems that drivers in California pay a lot more than they should be paying. The sad reality is that California drivers already pay more for gasoline than motorists in almost every other state. According to UC Berkeley professor Severin Borenstein, Californian drivers pay a premium of roughly 20 to 30 cents on every gallon pumped in the state. Borenstein calls the price differential “California’s mystery gasoline surcharge.” Borenstein stated,
There is no year prior to 2015 in which we didn’t have at least one month with a negative gasoline surcharge and now we’ve gone three years without such a month. If we’re actually going to find out what the problems is and address it, we’re going to have to go beyond people speculating … We need a lot more information.
Californians consume 40 million gallons a day and when that is multiplied over an entire year that comes to between $3 billion to $4 billion that is unaccounted. The Petroleum Market Advisory Committee (PMAC), a state committee, investigated the price discrepancy and turned in its report to the California Energy Commission last fall, but the committee surprisingly did not come up with a firm explanation. Some of the taxes that Californians pay are 18.4 cents per gallon in federal taxes, 10 cents a gallon to make cleaner-burning gasoline, 12 cents a gallon for the state’s cap and trade program, and 7 cents a gallon for the Low Carbon Fuel Standard among other taxes. Santa Monica-based Consumer Watchdog believes the oil industry is to blame for the price premium, but Borenstein believes a lot more information is needed to determine the actual problem. Borenstein wants to form a commission to investigate the problem, but he isn’t sure how much it would cost to establish a commission. Hopefully, the mystery of the gasoline surcharge can be solved one day and California drivers will get some relief when it comes to gasoline prices.