In response to Assembly Member Henry Perea’s request for an analysis on the impact of Fuels Under the Cap on Californian’s pocketbooks, the Legislative Analyst’s Office (LAO) confirmed gas prices will rise dramatically starting January 1, 2015. According to the LAO, the retail price of gas will increase by 13 to 20 cents per gallon as a result of the California Air Resource Board’s (CARB) addition of transportation fuels to existing cap-and-trade regulations. The result is a hidden gas tax that could raise gas prices by more than 50 cents per gallon by 2020.
“The magnitude of this price increase is uncertain. Under the most likely outcome, the price increase will be 13 cents to 20 cents per gallon by 2020. However, the price increase could exceed 50 cents per gallon by 2020.”
“The LAO’s research confirms what we’ve been saying all along,” said Fed Up at the Pump’s Jay McKeeman. “CARB has added the Fuels Under the Cap portion of existing cap-and-trade regulations to price Californians out of driving. Even worse, they are doing nothing to educate the public about this hidden gas tax. The increase in gas prices will harm small business owners, farmers, churches, community organizations and California’s disadvantaged already displaced by the drought and recession. A major increase in gas and diesel prices will have a ripple effect on the cost-of-living for millions of Californians, and those who can least afford it will end up paying the most.”
According to the report, “The magnitude of this price increase is uncertain. Under the most likely outcome, the price increase will be 13 cents to 20 cents per gallon by 2020. However, the price increase could exceed 50 cents per gallon by 2020.”
Assembly Member Perea commissioned the study to show the legislature the direct impact Fuels Under the Cap will have on California drivers, especially low-income and disadvantaged communities.
“There is widespread agreement that including transportation fuels in the Cap-and-Trade program will increase the retail price of gasoline,” Perea said in a statement. “This is why I authored Assembly Bill (AB) 69- so the California Air Resources Board (CARB) and the Legislature can have a practical policy debate and explore ways to provide relief to consumers who can’t afford gas hikes.”
The full report from the Legislative Analyst office sent to Assembly Member Henry Perea can be found here.