This browser does not support the Video element.
California gas tax increases on July 1
California drivers will see an extra 2.2 cents added to the state's gasoline excise tax, pushing the total to 63.4 cents per gallon.
LOS ANGELES - California drivers will pay more at the pump starting Wednesday, July 1, as the state's gas tax automatically increases for inflation.
The tax rate is climbing to a nation-leading 63.4 cents per gallon to support ongoing infrastructure maintenance.
What we know:
The California Department of Tax and Fee Administration announced that the gasoline tax will rise to 63.4 cents per gallon from the current 61.2 cents.
This 2.2-cent increase solidifies California’s position as the state with the highest gas tax in the nation.
SUGGESTED: New California laws taking effect July 1, 2026
Diesel taxes are also scheduled to climb, increasing by 1.6 cents to bring the new rate to 48.2 cents per gallon from 46.6 cents.
Dig deeper:
According to Governor Gavin Newsom’s office, this annual hike is automatic and tied directly to the California Consumer Price Index.
The tax was originally established in 2017 through the Road Repair and Accountability Act (Senate Bill 1) by the Legislature to fund critical road repairs and automatically adjust for inflation.
Voters later rejected an attempt to repeal this gas tax in a 2018 ballot measure.
According to AAA, the current average price for a gallon of regular gas in California is $5.43, though prices at the pump have generally been declining recently.
What we don't know:
It's unclear exactly how much individual regional pump prices will fluctuate following the implementation of the tax, or how long the current downward trend in overall fuel prices noted by AAA will offset the new tax burden for consumers.
The Source: This report is based on formal state compliance adjustments and data confirmed by the California Department of Tax and Fee Administration alongside official policy background from Gov. Gavin Newsom’s office. Current local pump data and market trends were provided through tracking by the American Automobile Association (AAA), detailing real-time impacts on drivers.