California, October 13, 2025
News Summary
California will see a rise in gas prices starting July 1 as the gas tax increases by 1.6 cents per gallon. This makes the total tax rate 61.2 cents, amid stricter air quality regulations that may further raise prices. The average price for gasoline in Los Angeles is currently $4.61 per gallon, reflecting a slight decrease from last year. Analysts predict a significant drop in gas tax revenue as zero-emission vehicles become more prevalent, leading to a potential decline in traditional gas consumption.
California is set to experience a rise in gas prices starting July 1, as the state’s gas tax will increase by 1.6 cents per gallon. This adjustment is part of an annual increase that brings the state’s total gas taxes to more than $600 per year for the average household. In addition to the tax hike, California will implement stricter air quality regulations next week, which could add another estimated 5 to 8 cents per gallon to gas prices.
Currently, the average price for a gallon of regular unleaded gasoline in the Los Angeles – Long Beach area is $4.61, reflecting a decrease of 18 cents compared to the same time last year. Despite earlier fears of significantly higher prices, the governor’s office has responded to misinformation suggesting gas prices could reach $8 per gallon by 2026, confirming that California’s current gas tax rates will remain manageable.
With California already holding the title for the highest gas tax rate in the country at about 59 cents per gallon, this rate is set to rise to 61.2 cents per gallon on July 1. Additionally, the tax on diesel fuel will see an increase from 45.4 to 46.6 cents per gallon. According to records from Caltrans, gas-powered vehicles in the state contribute approximately $300 per year in gas taxes.
Legislative analysts project that gas tax revenue will drastically decrease by $5 billion, or 64%, by 2035, as more drivers transition to zero-emission vehicles. California’s strategy includes phasing out gas taxes, replacing them with a California Road Charge that would assess drivers based on mileage instead of gallons used. A pilot program testing this system was launched in August 2024 and concluded in January, with results expected later this year.
Motor fuel taxes are a critical source of transportation revenue; however, their contribution has declined from 41% in fiscal year 2016 to approximately 36% in fiscal year 2024. California, alongside Oregon, aims to ensure that all new passenger cars sold will be zero-emission vehicles by 2035 as part of a broader environmental strategy.
The California Air Resources Board (CARB) has also approved amendments to the Low Carbon Fuel Standard program in 2024 to foster the use of lower-carbon fuels. Though these amendments were estimated to potentially raise gas prices by an additional 47 cents per gallon, such estimates have been reevaluated. The upcoming price hike is occurring amid volatility in global oil prices, affected by geopolitical tensions and domestic supply fluctuations, although current gas prices are 20 cents lower than this time last year, providing some relief for consumers ahead of the summer holiday season.
Experts predict that gas prices could see increases associated with the Low Carbon Fuel Standard, ranging from 65 cents in the near term to as much as $1.50 by 2035. Nonetheless, CARB disputes predictions of severe price surges.
FAQ
What is the new gas tax rate for California starting July 1?
California’s gas tax will increase by 1.6 cents per gallon, bringing the total gas tax rate to 61.2 cents per gallon.
How much will average households pay in gas taxes per year?
Total gas taxes in California exceed $600 per year for the average household.
What is the current average price of gasoline in California?
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 last year.
What future trends are expected for California gas tax revenue?
Legislative analysts predict gas tax revenue will fall by $5 billion, or 64%, by 2035, as zero-emission vehicles gain market share.
Key Features
| Feature | Details |
|---|---|
| New Gas Tax Rate | 61.2 cents per gallon starting July 1. |
| Annual Tax Increase | 1.6 cents per gallon. |
| Average Household Tax | Exceeds $600 per year. |
| Current Average Gas Price | $4.61 per gallon, down 18 cents from last year. |
| Projected Revenue Drop by 2035 | $5 billion, or 64% due to zero-emission vehicle uptake. |
Deeper Dive: News & Info About This Topic
- ABC7: California Looks to Eliminate Gas Tax
- Los Angeles Times: Summer Road Trip Gas Prices
- Politico: Newsom and California Fuel Standards
- Fox LA: California Gas Prices Increase July 1
- KTLA: Filling Up Will Cost More Starting Tuesday
- Wikipedia: Gasoline
- Google Search: California gas tax
- Google Scholar: California gas prices
- Encyclopedia Britannica: Gasoline
- Google News: California gas tax
Author: STAFF HERE COSTA MESA WRITER
COSTA MESA STAFF WRITER The COSTA MESA STAFF WRITER represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange 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 the OC Fair, Concerts in the Park, and Fish Fry. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Boys & Girls Clubs of Central Orange Coast, plus leading businesses in retail, fashion, and technology that power the local economy such as Vans, Experian, and South Coast Plaza. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
