California Has a Gas-Price Mystery: Too High, But Why?

California’s retail gas price was $4.32 a gallon in December 2022, while it was $3.09 a gallon on average elsewhere in the U.S. That is a $1.23-per-gallon difference. There are some quantifiable sources of the California premium. Higher state gas taxes are one reason. The state’s clean air policies are another. These include a cap-and-trade program for greenhouse-gas emissions, a low-carbon fuel standard and a fee for the abatement of leaking underground storage. California also mandates…

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