CA Excise Gas Tax Decline: How Will it Affect Prices at the Pump?

FRESNO, Calif. (KMJ) — The excise tax rate will fall from 36 cents to 30 cents a gallon Wednesday.

As defined by a complex formula signed 5 years ago by then-Governor Arnold Schwarzenegger, the Board of Equalization sets the rate by March 1st of every year. They examine the stability of gas prices, as well as consumption.

In addition, the so-called fuel tax swap allows the state to use gas tax revenue for debt repayment. Historically, that’s had minimal impact on prices at the pump.

Gas prices are nearly a dollar below what they were at this time last year, although Californians are still paying more than virtually the rest of the nation.