A vote by California regulators a couple weeks ago to update the state’s Low Carbon Fuel Standard could raise gas prices even more than initially expected, according to a new study from the USC Marshall School of Business.
According to the study, California’s fuel prices could increase as much as 62% higher than the national average next year.
The backstory: California regulators approved new restrictions on the carbon intensity of fuels on Nov. 8.
- The California Air Resources Board estimated last year that gas prices would increase by $0.47 with the new standards due to pass-through costs.
- The vote followed the special session of the Legislature that Gov. Gavin Newsom called to prevent spikes in gas prices. The Legislature approved his proposal to mandate oil refiners keep a reserve supply on hand at all times, giving the California Energy Commission increased authority over the state’s oil industry.
The big picture: The USC study looked at the board’s new vote and Newsom’s oil mandate, as well as the recent closure of Phillips 66 in Southern California and the gas tax increase scheduled for next year.
- All of those factors could combine to a price spike of nearly $0.90, including a $0.65 increase due to the recent vote.
What we’re watching: California Republicans plan to fight the price increases when the new legislative session starts, beginning with a bill to repeal the new Low Carbon Fuel Standard, according to State Senate Minority Leader Brian Jones (R–San Diego).
What they’re saying: “I’m concerned Californians will face major sticker shock and be unprepared for the rapid gas price spike in 2025, which could be an additional 90 cents per gallon, thanks to Gavin Newsom’s political agenda to drive up gas prices and force Californians into electric vehicles,” Jones said. “The average family with two drivers should be prepared to pay an additional $900 next year for gasoline.”
- Jones said Newsom’s political agenda is a direct attack on struggling Californians, which will have devastating consequences for the economy.
- “Workers will struggle to afford their commutes, the cost of goods will skyrocket, and families will be forced to cut back on even the most basic activities,” Jones said.
- Jones also called Newsom out of touch for recently purchasing a $9.1 million mansion.
- “While regular Californians face tough choices between putting food on the table or gas in their cars, Newsom will be chauffeured to work from his luxury home in a taxpayer-funded car, running on taxpayer-funded gas, on the rare occasions he decides to show up,” Jones said. “Californians deserve a governor who understands their struggles – not a coastal elitist, disconnected from reality, dictating policy from his Bay Area mansion.”
