Rising Gas & Electricity Prices

Sources:

1. December 22, 2025, the California tax and fee components are: $0.61 (state excise tax) + $0.15 (local sales tax) +$0.26 (cap and trade) + $0.14 (LCFS) + $0.02 (underground storage fee) for a total of $1.18 per gallon. For excise tax, see California Department of Tax and Fee Administration, “Sales Tax Rates for Fuels”; sales tax based on per gallon fuel price of $4.36 (via AAA as of December 16, 2025) and weighted average local tax rate of 3.50% (2.25% plus district taxes averaging 1.25%); for cap and trade, see “Aggregated Data Reported” in California Energy Commission “California Oil Refinery Cost Disclosure Act Monthly Report”; for underground storage fee, see California Department of Tax and Fee Administration, “Tax Rates — Special Taxes and Fees.”
2. The Los Angeles Times, “Phillips 66 is closing Wilmington-area refineries after more than a century, marking the end of an era” 16 October 2024 reported: “Factors that played into the decision included an ‘onerous’ regulatory environment that increases costs, lower demand for gas, and a dwindling supply of California crude oil, forcing the refinery to rely more on expensive shipments from Alaska and foreign countries.”; Attacks on tankers in the Persian Gulf and the Red Sea provide examples of geopolitical risks inherent in any crude or refined product import strategy. In addition, Iran has repeatedly threatened to block the Strait of Hormuz (as it did during the 1980s) through which a fifth of the world’s oil trade flows every day. Iran seized a cargo ship in the Strait as recently as November 2025.
3. The Los Angeles Times, “Phillips 66 is closing Wilmington-area refineries after more than a century, marking the end of an era” 16 October 2024 reported: “Factors that played into the decision included an ‘onerous’ regulatory environment that increases costs, lower demand for gas, and a dwindling supply of California crude oil, forcing the refinery to rely more on expensive shipments from Alaska and foreign countries.” In an October 2022 letter to the California Energy Commission, Valero Energy noted that “California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector.” The letter explained in detail how “California is the most challenging market to serve in the United States” given its isolation, environmental requirements, and restrictions against increasing capacity. In October 2024, Valero’s chief executive warned that “all options are on the table” concerning the refiner’s continued presence in California given regulatory pressure on the industry.
4. For examples of experts rejecting claims of oil company price gouging, see Michael Mische (USC Marshall School of Business), “A Study of California Gasoline Prices” March 2025, which states: “The economic evidence is abundant; California refiners have not engaged in widespread price gouging, profiteering, price manipulation, ‘unexplained residual prices’ or surcharges, magical or otherwise.” In “Pain at the Pump Blame Politicians, Not Producers, for High California Gasoline Prices” (March 2024), economists Lawrence J. McQuillan of the Independent Institute and Robert J. Michaels of Cal State Fullerton state: “Market fundamentals and institutions explain California gasoline prices without resorting to conspiracy theories inconsistent with economic logic and the available data … [Our study] debunks a common ‘price gouging’ explanation for high prices.” Speaking to Governor Newsom’s unsubstantiated claims of price gouging, a market analyst told ABC 10 in October 2022: “Newsom is wrong. What we’re seeing is simply misinformation. This is supply and demand related … Strict environmental guidelines make it hard to meet demand when there’s a cutoff in supply.” CalMatters, “What now for Newsom’s oil profits tax?” November 2022 reported that “[California Energy Commission] staff largely bolstered oil industry assertions that global and in-state factors largely beyond their control, rather than arbitrary price-gouging, caused the sharp spike in pump prices [in October 2022].” In February 2023 testimony to the California Senate Energy, Utilities and Communications Committee, Supervising Deputy Attorney General Michael Jorgenson confirmed that his office has yet to bring a price gouging or collusion case against California oil companies despite considerable attention on the matter for many years.
5. https://www.eia.gov/tools/faqs/faq.php?id=10&t=5
6. As of November 25, 2025, the U.S. Energy Information Administration “Monthly Electric Power Industry Report” shows California’s average residential electricity rate in the first nine months of 2025 was $0.3221/kWh versus $0.1915/kWh in the first nine months of 2019, an increase of 68.2%. Legislative Analyst’s Office, “Assessing California’s Climate Policies – Residential Electricity Rates in California” January 2025 states: “California’s electricity rates are among the highest in the country. On average, residential electricity rates in California are close to double those in the rest of the nation.”