It’s time to blow the whistle on the farcical efforts of California’s politicians — especially Gov. Gavin Newsom — to reduce the state’s high gasoline prices.
Newsom’s demand that the Legislature, which adjourned for the year in early September, reconvene in a special session on gas prices continues his crusade against the oil industry, charging it with price gouging.
However Newsom has never offered any persuasive evidence of such behavior, nor has it been confirmed by those who have seriously examined the factors that cause California gas prices to be the highest, or nearly the highest, of any state.
Severin Borenstein, a UC Berkeley economist regarded as the state’s leading expert on the issue, parsed the differential in a 2023 paper, pointing out that California’s direct and indirect taxes on fuel amount to nearly $1 per gallon — 70 cents higher than the national average of such taxes — and the state’s unique fuel blend to battle smog adds another dime.
Borenstein’s calculations leave what he calls the “mystery gasoline surcharge” of about 43 cents a gallon that cannot be directly attributed to crude oil prices, California’s taxes or other obvious factors. However, at least some of it reflects the relatively high costs of doing any kind of business in California — rents, electricity and other utilities, wages and regulatory overhead, for example.