A lot of confusion is swirling around a supposed 65-cent jump in California gas prices coming July 1. But that figure isn’t accurate. Here’s what’s actually changing—and what drivers should expect.
Starting July 1, California’s state gas excise tax will increase as part of an annual inflation adjustment. The tax will rise from 59.6 cents per gallon to 61.2 cents per gallon—an increase of just 1.6 cents. While that’s a noticeable change, it’s a far cry from the widely circulated claim that gas prices are about to skyrocket by 65 cents per gallon.
So where does the 65-cent number come from? Analysts say it likely includes estimated costs tied to California’s Low Carbon Fuel Standard (LCFS), a regulation that requires fuel producers to reduce carbon intensity. The LCFS can indirectly impact fuel prices, sometimes by 40 to 65 cents per gallon, depending on market conditions and how refineries adjust to meet state rules.
The reality for motorists is this: you can expect gas prices to go up slightly starting July 1, but the increase is more likely to be around 5 to 10 cents per gallon—not 65. The actual impact at the pump will vary based on other market factors like oil prices, supply chains, and refinery output.
Bottom line: there is a tax increase coming, but it’s small. The rest of the price hike chatter is tied to broader fuel regulations and market forces—not a sudden new state tax.
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By: Fred Roggin
June 21, 2025
