California Gas Tax Rises 2.2 Cents Per Gallon

SACRAMENTO — California’s state gasoline excise tax increased today, July 1, adding 2.2 cents per gallon to the tax drivers pay as part of the retail price of fuel. The state motor vehicle fuel tax is now 63.4 cents per gallon, up from 61.2 cents per gallon during the previous fiscal year, according to the California Department of Tax and Fee Administration.

For a 15-gallon fill-up, the increase amounts to about 33 cents, and for a 20-gallon fill-up, about 44 cents. Pump prices can still move by more or less than the tax increase because retail gasoline prices also reflect crude oil prices, refinery costs, transportation, station pricing, federal taxes, sales taxes, and other factors.

California collects fuel excise taxes from gasoline and diesel suppliers before fuel is delivered to retail stations, and the tax is built into the per-gallon price customers pay. The federal gasoline tax remains 18.4 cents per gallon.

The July 1 increase is an automatic adjustment required under Senate Bill 1, the Road Repair and Accountability Act of 2017. The law added 12 cents per gallon to the gasoline excise tax beginning in 2017 and requires annual inflation adjustments each July 1 based on the California Consumer Price Index, as calculated by the state Department of Finance.

The same annual adjustment also affects diesel. California’s diesel fuel excise tax rose Wednesday to 48.2 cents per gallon, up from 46.6 cents per gallon.

SB 1 was created to raise money for transportation infrastructure, including highway maintenance, local street and road repairs, bridges, culverts, transit, and safety projects. The California Transportation Commission says SB 1 provides about $1.5 billion per year in formula funding to cities and counties for basic road maintenance, rehabilitation, and critical safety projects.

The funding is especially relevant for rural counties, where road networks can be long, costly to maintain, and supported by a smaller local tax base. The Legislative Analyst’s Office has said county distributions for local road funding are based partly on the number of registered vehicles and partly on miles of maintained county roads. In fiscal year 2024-25, Sierra County received close to $1.5 million in road maintenance funding from the tax, according to State Controller data.

The California State Association of Counties, which supported SB 1, described the July 1 adjustment as “a critical road funding mechanism” for maintaining county transportation systems. The association said the fuel-tax adjustment helps counties pay for road work at a time when local governments continue to face rising construction and maintenance costs.

California voters considered a repeal of the 2017 fuel and vehicle tax package through Proposition 6 in 2018. The measure failed, leaving the SB 1 taxes and fees in place for highway and road maintenance, repairs, and transit programs.

The new rate is scheduled to remain in effect through June 30, 2027, unless state law changes before then.