Gas Stations to Show Drivers the Hidden Gas Tax

SACRAMENTO — Today, the California Independent Oil Marketers Association announced that they would begin to voluntarily disclose the costs of the state’s Cap and Trade program on a gallon of gas, rebuking the legislature’s failure to provide transparency for California drivers. After the legislature refused to disclose the costs Cap and Trade places on a gallon of gas in California, gas stations throughout the state will display custom-made notices (see table) that inform drivers that gasoline and diesel prices include a hidden gas tax of about 10 cents to comply with the program’s requirements.

“Californians are paying collectively $2 billion per year in higher gas prices because of the Cap and Trade Program according to well-founded and publically-available estimates,” said Jay McKeeman of CIOMA, a trade organization for gasoline retailers and wholesalers. “We want to be transparent with our customers about the components of the price they are paying. That’s why we are fulfilling this responsibility for our members and the general public.”

In 2015, California became the first state in the country to require gasoline and diesel fuel suppliers to pay into Cap and Trade Program that has now generated billions of dollars in revenue for the state. Unlike other taxes and fees, there is currently no disclosure of these added costs.

“When government is collecting a tax worth billions of dollars, it has a fundamental duty to disclose it to consumers,” said Assemblyman Tom Lackey (R-Palmdale). “… I am thankful gas station owners are willing to provide it absent a state mandate to do so.”

“Especially with the summer driving season upon us, taxpayers deserve to have complete transparency regarding how much they pay at the pump,” said David Wolfe, Legislative Director for Howard Jarvis Taxpayers Association. “We appreciate the private sector industry solution to a problem that government failed to address.”

Assemblyman Lackey and CIOMA brought forward Assembly Bill 2066 earlier this year. After passing its first committee with strong support, the bill was quietly killed without a vote.