California's gasoline excise tax increases by 2.2 cents per gallon on Wednesday, lifting the state's excise rate to 63.4 cents per gallon and pushing the total per-gallon surcharge burden — including sales tax and local fees — to roughly $1.15. Republican members of California's congressional delegation, led by Rep. David Valadao, sent a letter to Gov. Gavin Newsom on Friday urging him to suspend the hike before it takes effect.
Price Level and Tax Breakdown
The average California retail gasoline price stands at $5.58 per gallon, according to AAA data cited in the lawmakers' letter — the highest in the nation and $1.65 above the national average. Of that $5.58, approximately $4.43 reflects the underlying cost of gasoline; taxes and fees account for the remainder. Valadao argued that Central Valley families "can't afford to pay an extra 71 cents per gallon every time they fill up their tanks."
The annual excise increases are indexed to inflation under a 2017 California transportation law designed to fund road, highway, and transit projects. California voters rejected a 2018 ballot measure to repeal the law, leaving the automatic yearly adjustments in place.
Newsom's Defense and the Refinery Gap
Newsom has declined to suspend the increases, arguing that a gas tax holiday would jeopardize road repair funding. His office has also maintained that repealing gas taxes would deliver a windfall to oil companies rather than reduce prices at the pump. Newsom separately attributed higher fuel costs to disruptions linked to President Donald Trump's conflict with Iran and its effect on Strait of Hormuz shipping.
California's supply constraints compound the tax burden. Two major in-state refineries — operated by Valero and Phillips 66 — shut down this year, in part due to stringent state climate regulations that threatened their economic viability. Because California has no pipeline connections to major domestic oil-producing regions, the state imports roughly three-fourths of its crude oil. Approximately one-third of those imported barrels originate from the Middle East, amplifying the state's exposure to geopolitical supply shocks.
Corporate Exits and Long-Term Policy Trajectory
Chevron relocated its headquarters from California to Houston in 2024 after more than 140 years in the state, a move attributed to Texas' business environment and California's fossil-fuel regulations. Newsom has also backed a state goal to end all oil extraction in California by 2045.
Nine Republican House members signed Friday's letter alongside Valadao: Reps. James Gallagher, Tom McClintock, Vince Fong, Jay Obernolte, Young Kim, Ken Calvert, Darrell Issa, and Kevin Kiley. A Fox News poll released in June found that 23% of voters approve of President Trump's handling of gas prices nationally. A spokesperson for Newsom did not respond to a request for comment.