State gas tax hike goes into effect but partly offset by lower gas prices

California drivers can expect to pay a little more at the pump starting Wednesday as a state gas tax increase takes effect. But they might not feel the full impact for several months because a change in fuel blends will simultaneously bring prices down.

As part of Senate Bill 1, passed earlier this year, the base state gasoline excise tax increases by 12 cents per gallon. But Nov. 1 also marks the day when gas stations can switch to winter blend gasoline, which is cheaper to produce.

The American Automobile Association estimates this year's winter blend will cost about 6 cents less per gallon than the current summer blend, cutting the gas tax increase by half.

Diesel vehicle drivers won’t be so lucky. Excise taxes for that fuel are going up 20 cents per gallon with an added price-based sales tax bump from 9 to 13 percent — increases that won't be offset by cheaper blends.

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Starting in January, drivers will also be charged an extra registration fee, ranging from $25 to $175, based on the value of their cars. Electric vehicle drivers, who don't use gasoline or pay the gas tax, will be assessed a $100 annual fee starting in 2020. 

Lawmakers narrowly passed the gas tax and fee increases earlier this year to address a $59 billion backlog of needed road and bridge repairs. The measures will raise about $5 billion annually.

Republican leaders are trying to gather signatures to place a ballot measure repeal of SB1 before voters next year. A poll from the UC Berkeley Institute of Governmental Studies showed 58 percent of voters oppose the gas tax hike, with 39 percent reporting strong opposition.

California drivers already pay among the highest gas prices in the country, due in large part to the special blend of low emission fuel that complies with environmental regulations. Experts say the cleaner air that results translates into significant public health savings.

While the winter blend will hide the impact of the gas tax hike for now, that may not be the case next year when drivers will be pumping the pricier summer fuel.

However, California drivers regularly experience gas price fluctuations much larger than the 12-cent increase, with swings of a dollar or more from year-to-year or even station-to-station, based on factors like world markets and traffic patterns.

Because only a small number of refineries produce California's special blend of gasoline, the state is particularly sensitive to supply interruptions, such as those caused by disasters like Hurricane Harvey or the 2015 Torrance refinery fire. Both resulted in price jumps of 20 cents to 40 cents per gallon that have yet to completely subside.