California democrats have been steadily intentionally increasing gas prices in the state for years, more recently with propositions like prop 6 in 2018, but now they’re searching for a scapegoat as gas prices approach $6.00 per gallon in the state.
California Gov. Gavin Newsom on Monday ordered state Attorney General Xavier Becerra to investigate oil companies for allegedly overcharging consumers and price-fixing.
The request, which Atty. Gen. Xavier Becerra’s office said it would accept, comes amid growing frustration with high prices charged in communities across the state. The investigation has the potential to trigger the most consequential review of California’s gas prices in years, eclipsing the ineffectual efforts demanded by elected officials over the past two decades.
“There is no identifiable evidence to justify these premium prices,” Newsom wrote in a letter to Becerra.
Newsom’s request came on the heels of a long-awaited report released by the California Energy Commission on the cost of retail gasoline in California. The 10-page document, prepared after the governor asked the agency in April to examine the issue, concluded the state’s drivers spent $1.5 billion more than those in other states for gasoline in 2018 — even though there was no determinable difference in the gasoline being sold by different retailers.
“The name-brand stations, therefore, are charging higher prices for what appears to be the same product,” wrote commission officials. “The CEC received no response from the name-brand retailers in response to a request for information to support their product claims.”
Why Prices Are High?
Gas prices are approaching $6.00 per gallon currently because Democrats in California included Proposition 6 on the ballot during the 2018 election. A majority of yes votes on the proposition would have repealed the continual increase of the tax. But California, whihc has an ever growing non-english speaking population had other plans in mind. The language of the proposition was also very confusing, and this was likely intentional. In the end, the illiterate, stupid, and non-english speaking Californians voted against this proposition.
Many are blaming the language of the proposition, claiming the elites were betting that the growing non-english speaking population of the state would vote to increase their own taxes. If this accusation is true, they were right.
During the election, proposition 6 supporters tried to drive home a message to voters to overcome what they see as a misleading title and summary on the ballot initiative.
Proposition 6 would repeal an increase in fuel taxes and vehicle fees that is slated to fund $5 billion in transportation projects a year.
Its title on the ballot begins with: “Eliminates certain road repair and transportation funding.” Proponents say that doesn’t convey quickly enough its mission, which is why they titled it a “Gas Tax Repeal Initiative” in large letters on their mailer.
Proponents can challenge ballot language in the courts but didn’t for Proposition 6, a constitutional amendment that also seeks to require voter approval for future fuel tax hikes.
Instead, supporters have focused their efforts on branding the measure as a repeal of a gasoline tax hike they say is making California too expensive.
“We know when voters know ‘Yes on Prop 6’ is the gas tax repeal, they are more likely to support it,” said Dave McCulloch, a spokesman for proponents. “Lawyers are expensive, and we feel money is best used by educating voters.”
Gas prices are high because of tax increases, cap-and-trade legislation and environmental policies Newsom supports.
But, of course, he already knows this. Which is why the first-term governor is looking forward to the results of the study like Michael Moore is looking forward to lab results from his cardiologist.
According to AAA, at $4.10 a gallon, California has the highest gasoline prices in the nation. In contrast, the national average is $2.88 per gallon of regular grade gas. In Texas it’s $2.60, and in Florida it’s $2.76. Inexplicably, petrol is almost a half a buck a gallon cheaper in Hawaii than it is in California, and they have to pay to ship some of their gasoline in from … you guessed it, California!
Here in the Golden State, on every gallon of gas we pay 18 cents in federal excise tax, 42 cents in state excise tax, 28 cents for the state’s cap-and-trade program on greenhouse gases and low carbon fuel standards, around 8 cents of state and local sales taxes (varying by county) and 2 cents is earmarked to clean up old gas station sites. That’s 98 cents per gallon, just in taxes. (All amounts rounded to the nearest penny.)
Also, California requires refineries to produce a special “summer blend” of fuel that causes motorists to pay more at the pump.
According to the nonpartisan Legislative Analyst’s Office, under cap-and-trade, gas prices could increase by 73 cents per gallon by 2031.
In reality, cap-and-trade is almost six times worse than the most recent gas tax increase, which was 12 cents a gallon.
About half of the price difference between California and other states is due to taxes, cap and trade and the state’s low-carbon fuel standard, according to the commission’s report. Higher refiner and retailer margins account for another third. California refineries boast larger margins because they face higher regulatory costs and less competition.
The commission also says retailer margins have inexplicably grown since 2012, especially among gasoline brands like 76, Chevron and Shell. Between 2010 and 2018 California brand-name station margins increased by about 30 cents a gallon versus six cents on average nationally. The agency suggests price fixing may be to blame.
But about 95% of gas stations with convenience stores are independently owned, which includes mom-and-pops that license brand names. Some consumers will pay more for brand-name gas as they will for Prada purses or Starbucks lattes. As gas prices rise, consumers may also burn more money than they save driving in search of the cheapest stations.
No End in Sight
Gas prices are at their highest level in California in five years, but even as some stations are charging $5 a gallon, one analyst predicts there may soon be relief for motorists at the pump.
A gallon of regular unleaded gasoline reached an average of $4.19 in the Golden State Tuesday. That follows a 16-cent spike in gas prices statewide, the biggest weekly increase in the U.S. over a period that ended Monday, AAA reported.
Gas prices haven’t been this high in the state since May 2014.
California motorists continue to pay the most for gas in the country, with the cost about $1.54 higher than the national average.
But many parts in California are paying well above the state’s average.
In Mono County, which has the most expensive gasoline prices in the state, the average is approaching $5; as of Tuesday, it stood at $4.93, according to AAA.