California drivers already pay the highest gas prices in the country. A USC Marshall School of Business report found those prices could hit $8 a gallon by the end of 2026. And Sacramento just made it worse.
The California Air Resources Board recently approved amendments to the state's cap-and-invest program, placing a strict limit on greenhouse emissions that decreases every year. Chevron warned Tuesday that the plan could add another $1.21 per gallon to California gas prices. That is on top of a statewide average that already sits at $4.81, compared to a national average of around $3.
According to the New York Post, state Sen. Suzette Valladares of Southern California dubbed the cap-and-invest program the "cap-and-tax" scheme and urged Governor Gavin Newsom to scrap it. Her colleague, Republican state Sen. Tony Strickland, called on Newsom to convene a special session to address prices and proposed legislation that he says would lower the cost of unleaded gas by $1.08 a gallon.
Representatives for Governor Newsom did not respond to requests for comment.
The gap between what Californians pay at the pump and what the rest of the country pays is not an accident of geography. It is the arithmetic of policy.
The "California premium" breaks down like this:
Tim Stewart, president of the US Oil and Gas Association, put it in perspective.
"There are six different taxes or fees on each gallon. By contrast, the federal tax is eighteen cents. So California's taxes and fees are 10 times those of the federal government's tax."
Every one of those costs is a policy choice. Every one of them lands on the driver.
The tax burden is only half the problem. California has spent two decades restricting domestic production and refinery capacity while growing more dependent on foreign oil. The state now imports over 60% of its crude from foreign markets. Valladares put the import figure for total demand even higher, at nearly 70%.
That dependency turns every global disruption into a California crisis. And the margins are razor-thin. Valladares warned that losing just one more refinery would strip 10% from California's supply.
"We're looking at having to wait in lines as they did in the '70s because we simply will not have the supply if we're importing nearly 70% of our demand. We have a choice between a soft landing or a hard landing that collapses our economy."
California experienced exactly that kind of collapse twice before. The 1973 Arab OPEC oil embargo, following the Yom Kippur War, triggered the first major gas shortage. The 1979 disruption from Iran's Islamic Revolution triggered the second. During that crisis, the state imposed rationing: odd-numbered license plates could buy gas only on odd days, even plates only on even days. Long lines, fights at gas stations, and riots over price hikes followed.
With rising tensions in the Middle East now threatening global oil supplies, Strickland warned that the state is walking into the same trap.
"With rising tensions in the Middle East threatening global oil supplies and new proposed amendments from the California Air Resources Board that could drive prices higher, we are creating a perfect storm for even higher costs at the pump."
Newsom's policies are designed to meet California's commitment to net-zero greenhouse gas emissions by 2045. That is the justification for every fee, every restriction, every refinery closure that has brought the state to this point. The climate target is the reason. The $4.81 average is the cost.
Valladares traced the trajectory plainly.
"Policy after policy over the last two decades has brought us to this point where we now pay the highest gas prices in the nation, nearly 50% more than every other state."
The cap-and-invest program alone adds an estimated $1 per gallon, according to Valladares. CARB's new amendments could pile on another $1.21 per Chevron's analysis. Strickland's proposed bill would eliminate the state gas tax, cap-and-trade costs, and the low-carbon fuel standard, which he says would deliver over $1 in savings per gallon. That bill sits waiting while prices climb.
There is a particular cruelty in the way these policies operate. They are sold as climate leadership, a moral obligation to future generations. But the costs do not fall on the people who design them. They fall on the commuters driving 45 minutes each way to a job in the Central Valley. They fall on the small business owner whose delivery costs have doubled. They fall on the family choosing between a full tank and a full grocery cart.
Stewart warned that the damage is spreading beyond state lines.
"All of this could have been avoided. And it is now getting to the point where lousy energy policy in California is starting to impact other states like Nevada and Arizona."
Strickland has introduced legislation. Valladares has sounded the alarm publicly. Both have asked Newsom to act. The governor's office has not responded.
That silence is its own answer. Newsom has the power to lower gas prices. He could support Strickland's bill. He could suspend the state gas tax. He could halt CARB's new amendments. He could convene a special session. He has done none of these things.
The 2045 net-zero target remains the priority. The $8 gallon is the price Californians may be asked to pay for it. And the people writing the policy will not be the ones standing in line.