While gas prices are dropping rapidly across the U.S. under President Trump’s energy policies, California drivers are still paying a premium, with prices averaging $4.65 per gallon as of May 23, 2025. The state collects $1.55–$1.65 per gallon in taxes and fees, raking in $19.84 billion in 2024 from 13.4 billion gallons taxed. The federal government takes $0.184, while oil production, refining, shipping, and retail split about $3.00. Without California’s taxes and regulatory costs like CARB, LCFS, and UST, gas could cost just $2.50 per gallon, with logistics pushing it to $3.05. So, why is California an outlier, and where’s all that tax money going?
Nationally, Trump’s push for deregulation and increased domestic oil production has driven prices down, with the average hitting $3.17, a sharp decline from $3.66 a year ago. States like Mississippi enjoy prices as low as $2.66, thanks to policies encouraging supply growth. But in California, high taxes and green mandates keep prices elevated, with some blaming Governor Newsom’s policies for negating federal relief. Posts on X highlight frustration, noting California’s $0.78/gal tax hike and boutique fuel blends inflate costs.
California claims gas tax revenue funds roads, transit, and climate programs. Billions are allocated for infrastructure, yet potholes persist. Significant funds go to environmental initiatives like LCFS and cap-and-trade, but critics argue these are inefficient, with billions funneled into projects like the $100 billion high-speed rail, which remains incomplete. Administrative bloat and regulatory costs further erode the budget, raising questions about transparency.
As a political leader, I’d propose suspending non-essential fees like LCFS ($0.20–$0.30/gal) and easing CARB rules to lower refiner costs. Long-term, I’d demand public audits of tax spending and incentivize local oil production to reduce import reliance. Expanding pipelines could cut logistics costs, and targeted tax credits could help low-income drivers.
Where do you think California’s $19.84 billion in gas tax revenue is really going? Are we fixing roads, fighting climate change, or funding mismanagement? Why is California missing out on the national price drop? Share your thoughts below—tell us where the money lands and how to make gas affordable again.
And how much did you pay this Memorial Day Weekend in your neck of the woods?