California Gas Tax Increased on July 1: What Drivers Need to Know
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California Gas Tax Increased on July 1: What Drivers Need to Know

  • Writer: avdailynews.com
    avdailynews.com
  • 2 days ago
  • 2 min read

Palmdale, CA.- California motorists will pay more at the pump beginning July 1, 2026, as the state’s excise tax on gasoline automatically increases under state law.


According to the California Department of Tax and Fee Administration (CDTFA), the state gasoline excise tax will rise from 61.2 cents to 63.4 cents per gallon, an increase of 2.2 cents per gallon. The diesel fuel excise tax will increase from 46.6 cents to 48.2 cents per gallon, an increase of 1.6 cents per gallon. These rates are adjusted annually based on inflation as required by California law.

New Fuel Tax Rates (Effective July 1, 2026)

Fuel Type

Previous Rate

New Rate

Gasoline

61.2¢ per gallon

63.4¢ per gallon

Diesel

46.6¢ per gallon

48.2¢ per gallon

Why Is the Tax Increasing?

The annual adjustment is required under the Road Repair and Accountability Act of 2017 (Senate Bill 1). SB 1 established annual inflation adjustments to California’s fuel excise taxes to help ensure transportation funding keeps pace with rising construction and maintenance costs. The revenue is dedicated to projects such as:

  • Road maintenance and repairs

  • Highway improvements

  • Bridge rehabilitation

  • Public transit

  • Local street improvements

  • Transportation safety projects

How Much More Will Drivers Pay?

For most drivers, the tax increase alone is relatively small:

  • A 15-gallon fill-up will cost approximately 33 cents more because of the gasoline tax increase.

  • Actual pump prices may rise or fall much more depending on:

    • Crude oil prices

    • Refinery operations

    • Fuel supply

    • Seasonal fuel blends

    • Market demand

The state excise tax is only one component of the price consumers pay at the pump.

California Still Has the Nation’s Highest State Gas Tax

With the July 1 adjustment, California’s gasoline excise tax reaches 63.4 cents per gallon, remaining the highest state gasoline excise tax in the United States. This figure does not include the federal fuel tax or local sales taxes that also contribute to the final price at the pump.

Official California Government Sources

For readers seeking official information, these California government resources provide details on the fuel tax changes:

  • California Department of Tax and Fee Administration – Fuel Tax Rates⁠

  • Road Repair and Accountability Act (SB 1) Overview⁠

  • California Governor's Office – Gas Price Fact Check and Fuel Price Information⁠

Bottom Line: Beginning July 1, 2026, Californians will pay an additional 2.2 cents per gallon in state gasoline excise tax. While the increase adds only a few cents to a typical fill-up, overall gasoline prices will continue to fluctuate based on broader market conditions beyond the state tax.

 
 
 
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