CA’s Exacting Fuel Standards Mean Higher Pump Prices

By Holly Quan | August 12, 2009
KCBS – 740 AM 106.9 FM

SAN FRANCISCO (KCBS) -- Californians pay gas taxes that are 43 percent higher than the national average. That's according to a new study out from a coalition of transportation related businesses looking to solve the mystery over the state's high fuel costs. The idea is to show consumers how the state's tough environmental policies are driving up the price of gas.

According to analysis done by UC and Cal state economists, gas taxes are just part of the reason Californians pay more for gas than drivers in other states.

"Californians pay an average of approximately 30 cents extra per gallon in comparison to drivers in other states, and this differential has been increasing since about 1990," said Dr. Wallace Walrod, who is the director of research for the Orange County Business Council.

The council coordinated the study for a new non-profit group called Fueling California. Its a coalition of businesses with transportation interests like United Airlines, Avis and Chevron.

"California has among the most demanding set of unique fuel policies in the world, leading to a myriad of distinct fuel standards and blends," said Walrod. "Currently Californians pay between five and 15 cents extra per gallon of gasoline solely due to the special blends required in the state."

Those special blends are part of what makes California so environmentally sound, yet they can also cause price spikes when supplies run low. The study suggests lowering gas taxes during supply shortages and easing up on the special blends when prices run high.