SAN DIEGO — Governor Gavin Newsom announced a special session this December to impose a windfall profits tax on oil companies.
This comes as the gap between California's gas prices and the rest of the United States has never been larger.
The gap
That gap between the national average of $3.89 and California's average of $6.39 means we are now paying $2.50 per gallon more here in the Golden State.
"Even though oil prices have dropped, our gas prices have gone up... so something is terribly, terribly wrong," said Charles Langley of Public Watchdogs.
While some analysts have pointed to refinery shutdowns contributing to these skyrocketing prices, there are other factors at play, including California's strict environmental laws, requiring special summer and winter gas blends, as well as the highest gas taxes in the country: tacking about $1.40 on to every gallon of gas we buy here.
The breakdown
Taxes and fees
For every gallon of gas in California, we pay:
- 54 cents in state excise tax: among the highest in the nation
- 18.4 cents in federal excise tax
- 23 cents for California's cap-and-trade program to lower greenhouse gas emissions
- 18 cents for the state's low-carbon fuel programs
- 2 cents for underground gas storage fees
- An average of 3.7% in state and local sales taxes
"Local governments are the ones that are really making out well because they are getting a percentage-based tax," Langley pointed out. "It's not a flat excise tax."
He added that this percentage-based tax can be a boon for cities, to ostensibly pay for things like road repair and maintenance.
"You don't see a lot of political leaders getting furious about high gas prices in the way you would kind of expect them to, because it is actually a great bailout for a lot of city governments," he told CBS 8.
California's significantly less competitive market, compared to other states, is a driving factor behind these soaring prices, according to Langley.
"We need to get more competition into this market," he said. "It's not a matter of there not being enough gasoline. It's a matter of not having real competition."
He's also calling for California's attorney general to launch an anti-trust investigation.
"The call for an investigation and the actual act of investigating tends to bring the oil companies in line," Langley added.
WATCH RELATED: 'It's time to get serious': Newsom says he's calling special session to tax oil companies (Oct. 2022).