The biased media and the politicians are making false claims about gasoline prices.
They want you to think President Trump’s tariffs are causing gas prices to rise.
In reality, crude oil actually costs 15 percent less now than it did before the president revealed his plans to impose stiff new tariffs on imports from most countries.[1]
And the price will decline even more when domestic oil production increases and the U.S. becomes energy-independent again – as we were during President’s first term.
The average price or regular gas across the U.S. in 2025 has ranged from $3.08 per gallon in January to $3.19 per gallon on May 15th.[2]
But if you live in California, you’ve only seen prices below $4 per gallon for a brief period of time in March.
So why are gas prices in some states so much higher than in others?
And why don’t the oil companies tell us how much of the price we pay per gallon goes to the government?
Let’s face it – high gasoline prices and car registration fees hurt us all. The poor and middle class suffer the most.
But fuel price increases also impact every business and every consumer because the increasing costs of transportation – which add to the cost of production – are passed on to consumers in the form of higher prices for everything you buy.
The dirty little secret is how much you pay to the government for each gallon of gas you buy.
The federal government imposes a gas tax of 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.
These taxes have been unchanged since October 1993 and are not indexed to inflation – which increased by 111% between October 1993 and December 2023.[3]
But federal gas taxes are just the beginning…
Each state – with the exception of Mississippi – plus the District of Columbia adds its own taxes – ranging from 8.95 cents per gallon in Alaska to 59.6 cents per gallon in California (45.4 cents per gallon for diesel fuel) … and some counties add additional taxes on top of the state taxes.
California actually adds the following 4 additional taxes on top of the high state excise tax:
- State and local sales tax – 2.25% of fuel cost for gasoline and 13% of fuel cost for diesel. Additional county and local sales taxes are added, which vary by locality. This amounts to an average tax of 11cents for gasoline and 65 cents for diesel.
- Low Carbon Fuel Standard (LCFS) – requires suppliers of high-carbon fuels to purchase credits, which are passed on to consumers. The “tax” is projected to be 47 cents per gallon in 2025 by the California Air Resources Board due to stricter regulations.[4]
- Cap-and-Trade Program – requires fuel suppliers to purchase carbon allowances. Projected cost to consumers in 2025 is 31cents per gallon.[5]
- Underground Storage Tank (UTS) Fee – funds the cleanup of underground storage tank leaks. The fee is 2 cents per gallon.[6]
The federal excise tax on gas plus the 5 state taxes in California add $1.69 to the cost of a gallon of gas — $2.088 to each gallon of diesel fuel.
There are several other reasons why California has the highest gas prices in the nation:
- California doesn’t allow drilling or fracking for oil.
- California refuses to allow the construction of new refineries. In fact, the state is closing down existing refineries.
- California is a net importer of oil – even though it has more oil than any other state.
- The state legislature requires that only a special blend of low-emission gasoline is sold in California between April 1 and October 1 every year.
Here are the 5 states with the highest total taxes per gallon on gasoline (including the 18.4-cent federal tax):
- California – $1.69
- Illinois – 85.5 cents (77.1 cents in Chicago)
- Pennsylvania – 77.1 cents
- Indiana – 72.9 cents
- Washington – 71.8 cents (additional local taxes in some counties)
Here are the 5 states with the lowest total tax per gallon of gas:
- Mississippi – 18.4 cents (no additional state taxes)
- Alaska – 27.35 cents
- Hawaii – 36.9 cents (plus varying local taxes)
- Texas – 38.4 cents (no change since 1991)
- Missouri – 38.4 cents
Prices fluctuate weekly. You can check the latest information on state and national average prices and trends by clicking here.
Vehicle registration fees are another source of revenue that varies widely by state and by vehicle type, weight and value.
The number of fees included when registering a car in California is mind-boggling.
Here are just a few of them:
- Registration Fee
- California Highway Patrol (CHP) Fees
- Transportation Improvement Fee (TIF)
- Vehicle License Fee (VLF) – 0.65% of car’s value
- Miscellaneous Registration and Service Fees
Then there are County/District Fees that vary based on where you live:
- Service Authority for Freeway Emergencies Fee (SAFE)
- Air Quality Fee
- Auto Theft Deterrence/DUI Fee
- Abandoned Vehicle Abatement Fee
- Fingerprint ID Fee
- County Transportation Project Fee (CTPF)
These are all hidden fees collected by the California DMV that don’t show up on a registration renewal notice.
No wonder California total vehicle registration costs are the highest in the nation!
One other note: The Transportation Improvement Fee (TIF) is used to repair infrastructure and provide road maintenance. The state also receives billions of dollars annually for road maintenance and infrastructure from:
- The 18.4-cent federal excise tax on every gallon of gasoline sold in the state
- The highway funds portion of California property taxes
Here is where the roughly $10 billion in California gas taxes and vehicle fees collected in 2024 supposedly went:
- Highway repairs, maintenance and public transit (buses and trains) – 59%
- Enforcement and regulation (DMV, California Highway Patrol) – 22%
- Local law enforcement, General Fund, Dept. of Food and Agriculture, Dept of Parks and Recreation – 7%
- Debt service – 7.5%
- Administration (includes costs of collecting, distributing and auditing gas taxes and fees) – 3%
- Environmental mitigation, bike path and pedestrian amenities, transportation-related research and workforce development – 1.3%
Some of these categories are too broad to maintain accountability…
For example, there’s no breakdown showing how much of the 59% — representing $5.9 billion – went toward highway and bridge repair versus public transit – including the ill-conceived and incredibly wasteful high-speed bullet train project between Bakersfield and Merced.
No wonder California has some of the worst maintained freeways and state highways in the nation.
What do you think? Email me at [email protected].
[1] Rebecca F. Elliott, https://www.nytimes.com/2025/04/06/business/energy-environment/oil-prices-trump-tariffs.html#
[2] Maggie Davis, https://www.lendingtree.com/credit-cards/study/us-gas-prices/
[3] https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States
[4] Noel Fletcher, https://www.ttnews.com/articles/rising-fuel-taxes-2025
[5] Ibid.
[6] https://factspergallon.com/