California Governor Escalates War On Gasoline Impacting Neighboring States

California Governor Escalates War On Gasoline Impacting Neighboring States

Authored by Mike Shedlock via,

Prepare to pay another $1 per gallon in California with higher prices in Nevada and Arizona too.

The War on Gasoline a Gift to Trump

The Wall Street Journal says Gavin Newsom’s War on Gasoline Is a Gift to Donald Trump.

California’s prices are the highest in the country—$5.21 a gallon on average vs. $3.59 nationwide—owing to hefty taxes and burdensome regulations, such as its cap-and-trade program and low-carbon fuel standard. Here’s the rub: California refineries supply nearly 90% of Nevada’s gasoline and half of Arizona’s.

Mr. Newsom is escalating his war on the industry. The California Energy Commission is planning to impose a tax on refineries’ “gross margins”—i.e., the difference between wholesale gasoline and crude prices plus certain regulatory costs. The gross margin notably doesn’t include refiners’ operating costs, which include employee pay.

Mr. Newsom conflates profits and gross margins. According to the commission’s data, refiners lost between 10 and 38 cents on each gallon they produced from October 2023 through February 2024, while their gross margins ranged from 56 to 79 cents a gallon. In December, California refineries lost 31 cents a gallon while the state imposed $1.15 a gallon in taxes and regulatory fees.

The price gougers in Sacramento now want to penalize drivers even more. Mr. Newsom is pushing the commission to finalize the refinery tax at the same time as the California Air Resources Board, or CARB, prepares to tighten its low-carbon fuel standard and greenhouse-gas emissions cap. These regulations add about 54 cents to the price of each gallon of gasoline. CARB’s rules will increase the cost by an estimated 88 cents a gallon in 2026 and $1.01 by 2031.

Nevada Gov. Joe Lombardo last week sent Mr. Newsom a letter expressing concern that the new tax and regulations will “lead to limited supplies and higher fuel costs for consumers in both of our states.” Mr. Newsom’s response? Another deflection. He accused Mr. Lombardo of parroting the “talking points” of “Big Oil donors.”

Arizona and Nevada are increasingly trending in Mr. Trump’s direction as working-class Hispanics bear the brunt of the Biden administration’s policies. Many migrated from California—and like America’s émigrés from socialist countries, they don’t want to relive the misery from their former lands.

Gasoline Top Six

  • California: $5.21

  • Washington: $4.60

  • Oregon: $4.38

  • Nevada: $4.38

  • Alaska: $4.35

  • Arizona: $3.90

California pays $1.62 more than the national average and $0.61 more than Washington, the second highest state.

Despite refiners losing money, Newsom seeks new taxes causing a complaint from Nevada.

If I was a refiner, I would leave that hell hole and let California fend for itself.

The EU Is Spending Billions on Hydrogen-Ready

Across the Atlantic ocean, The EU Is Spending Billions on Hydrogen-Ready, But Where’s the Hydrogen?

I’m all in favor of hydrogen-powered plants to produce electricity if only we had cheap hydrogen. But we don’t and likely won’t.

Tyler Durden
Tue, 05/21/2024 – 14:25

via ZeroHedge News Tyler Durden

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