The Mystery of California's High Gas Prices

[Riddick]

Californians pride themselves on being number one. Highest population. Biggest economy. Top public university system. Most Inn-and-Out locations per capita. Let us count the ways in which the Golden State comes first in the nation.

But in the competitive category of money spent on gasoline, Californians hold a more dubious distinction: Across the contiguous United States, nobody pays more to fill ‘er up. At first glance, the culprit for this pricing mismatch might seem obvious.

California also comes first in stringent environmental regulation and, sure enough, taxes, fuel standards, and a newly expanded cap-and-trade program all conspire to make driving in California more expensive. But not this expensive.

With state officials investigating, the California price gap remains an economic mystery. And a very expensive one. Over the last 18 months, California drivers have paid $10 billion more than their counterparts around the country.

That’s a silent tax of $170 per year levied on each resident of the largest state in the country—and nobody knows exactly why.

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