Are Sky High California Gas Prices in Store for the Rest of the U.S.?

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Want to know how high gasoline prices can go thanks to administration policies? Just look at where they’re already at in California.

At $4.55 per gallon, gasoline in California is more than $1 above the $3.39 national average, which itself is over $1 higher than a year ago. But rather than reject the policies that made gas so costly in California, the Biden administration is embracing them as a model for the nation.

Biden is all in on the climate agenda and wants to impose California-style regulations that make drivers pay extra based on gasoline’s contribution to climate change. Tailpipe emissions include carbon dioxide, a greenhouse gas. The state already adds around 36 to 38 cents per gallon in regulatory costs via two of its climate change initiatives, the cap-and-trade program and low-carbon fuel standard. On top of that, California gas taxes are the nation’s highest, at 67 cents per gallon, about 37 cents per gallon higher than the average of the other states. Recent state tax hikes there were justified in significant part on climate change grounds

Now, Congress is working on a $3.5 trillion-dollar budget reconciliation package that Biden has promised to sign, and it will likely include gas price-boosting measures. A leaked list of proposed measures from the Senate Finance Committee shows the California influence. Among its provisions are a new federal tax on the carbon content of fossil fuels and a separate tax on each barrel of oil produced. Even though imposed upstream from consumers—which explains the rhetoric about making big oil pay its fair share—we know from California’s experience that the costs get passed down in the form of higher prices at the pump.

Even if these measures do not survive in the final version of the spending bill, they are what the administration wants and will almost certainly be back.

Biden has already done plenty to put upward pressure on gasoline prices. This includes efforts to halt oil leasing on federal lands, disapproving infrastructure projects like the Keystone XL pipeline, and regulatory changes likely to raise the cost of domestic oil production. But in an instance of blame-shifting, the president recently asked oil companies to get prices under control, implying that they are refusing to increase supplies when the government is making it harder for them to do so.

California’s pump prices are still rising, and a $5.00 per gallon state average is likely. Meanwhile, President Biden is doing everything he can to force the rest of the country to catch up.