California, October 13, 2025
News Summary
Starting July 1, Californians will see a rise in gas prices due to a 1.6 cents per gallon gas tax increase. Stricter air quality regulations could add an additional 5 to 8 cents per gallon. This tax hike will lead to over $600 in annual gas taxes for the average household, further positioning California as having the highest gas taxes in the U.S. Despite the increases, prices remain lower than last year, with current average gas prices at $4.61 in the Los Angeles area.
California residents can expect an increase in gas prices starting July 1, as the state implements a 1.6 cents per gallon rise in gas tax as part of its annual adjustment. This increase follows an announcement from Governor Gavin Newsom’s office that stricter air quality regulations will also take effect, potentially adding an estimated 5 to 8 cents per gallon to gas prices.
As a result, the total gas taxes in California will exceed $600 per year for the average household, positioning the state with the highest gas tax rate in the country at about 59 cents per gallon, which is set to increase to 61.2 cents per gallon. Additionally, the tax on diesel fuel will rise from 45.4 to 46.6 cents per gallon.
Despite the impending price hikes, the average price for a gallon of regular unleaded in the Los Angeles – Long Beach area is currently $4.61, which is down 18 cents compared to the same time last year. Newsom’s office has addressed and debunked misinformation suggesting that gas prices could reach $8 per gallon by 2026.
According to Caltrans, gas-powered vehicles in California contribute approximately $300 a year in state gas taxes. Yet, a long-term trend indicates a decline in gas tax revenue, which is predicted to fall by $5 billion, or 64%, by 2035 due to the increasing market share of zero-emission vehicles. As a response to this trend, the state aims to phase out gas taxes in favor of a California Road Charge that would charge drivers based on mileage rather than gallons used. A pilot program testing the road charge system was conducted from August 2024 to January, with results expected later this year.
Motor fuel taxes traditionally constitute a significant portion of transportation revenue, but that contribution has decreased from providing 41% in fiscal year 2016 to roughly 36% in fiscal year 2024. California and Oregon are also progressing toward the goal that all new passenger cars sold be zero-emission vehicles by 2035.
The California Air Resources Board (CARB) has recently approved amendments to the Low Carbon Fuel Standard program in 2024 to encourage the use of lower-carbon fuels, which will likely lead to cost increases at the pump. Initially, CARB estimated that these amendments could raise gasoline prices by as much as 47 cents per gallon; however, this estimate has since been moderated. Meanwhile, current global oil prices continue to fluctuate, influenced by various geopolitical tensions and domestic supply changes.
Although gas prices are set to increase, they currently remain 20 cents per gallon lower than last year, providing some relief as residents approach the summer holiday season. Experts have projected future rises in gas prices from the Low Carbon Fuel Standard could range from 65 cents in the near term to as much as $1.50 by 2035, although CARB disputed these severe predictions.
Frequently Asked Questions
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What is the new gas tax rate in California effective July 1?
The gas tax rate will increase from about 59 cents to 61.2 cents per gallon.
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How much will gas taxes cost the average California household annually?
Total gas taxes in California will exceed $600 per year for the average household.
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What are the predicted increases in gas prices due to air quality regulations?
The stricter air quality regulations could add an estimated 5 to 8 cents per gallon to gas prices.
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How much does California’s gas price currently compare to last year?
The average price for a gallon of regular unleaded in the Los Angeles – Long Beach area is currently $4.61, down 18 cents compared to last year.
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When is the California Road Charge pilot program set to conclude?
The pilot program testing the road charge system was launched in August 2024 and concluded in January, with results expected later this year.
Gas Price Factors Summary
| Factor | Impact on Gas Prices |
|---|---|
| Annual Gas Tax Increase | 1.6 cents per gallon |
| Stricter Air Quality Regulations | 5 to 8 cents per gallon |
| Current Average Gas Price in LA | $4.61 |
| Total Gas Taxes for Average Household | Over $600 per year |
| Expected Gas Tax Rate on July 1 | 61.2 cents per gallon |
Deeper Dive: News & Info About This Topic
- NBC Los Angeles
- Los Angeles Times
- FOX LA
- ABC7 News
- Politico
- Wikipedia: Gasoline
- Google Search: California gas prices
- Google Scholar: California gas tax impact
- Encyclopedia Britannica: gasoline
- Google News: California gas prices
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego 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 Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
