California’s gasoline excise tax rose to 61.2 cents per gallon on July 1, 2025, up 1.6 cents from the 59.6-cent rate that had been in place since July 1, 2024.1California Department of Tax and Fee Administration. Fuel Taxes The increase happens every July 1 automatically under a formula tied to the California Consumer Price Index, so no new legislation is needed for the rate to climb. The California Department of Tax and Fee Administration announces the new figure each spring, and the July 1, 2026 rate will be set the same way once the department publishes it.
The Current Rate
The state excise tax on gasoline is 61.2 cents per gallon as of July 1, 2025.1California Department of Tax and Fee Administration. Fuel Taxes The prior year’s rate was 59.6 cents, and before that 57.9 cents, so the pattern over recent years has been annual bumps of roughly 1.5 to 1.7 cents.
This is a fixed per-gallon charge, not a percentage of the price. Whether gas is $3.50 or $5.50 at the pump, the excise portion stays at 61.2 cents. Station operators collect it at the point of sale and remit it to the state, and it’s already baked into the number on the pump display.
Why the Rate Goes Up Every July 1
The annual increase comes from the Road Repair and Accountability Act of 2017, known as Senate Bill 1. Before SB 1, the state gas excise tax hadn’t been raised since 1994, and decades of inflation had eroded what it could pay for.2Metropolitan Transportation Commission. Road Repair and Accountability Act (SB 1)
SB 1 added 12 cents per gallon starting November 1, 2017, and locked in automatic annual adjustments beginning July 1, 2020. Each July 1, the rate moves by the change in the California Consumer Price Index over the preceding 12 months, calculated by the Department of Finance and rounded to the nearest tenth of a cent. Revenue and Taxation Code Section 7360(d) applies that adjustment to all three layers of the state gasoline tax: the original 18-cent base, a 17.3-cent supplemental rate, and the 12-cent SB 1 surcharge.3California Department of Tax and Fee Administration. Motor Vehicle Fuel Tax Law – Sec. 7360
Because the formula is written into law, the legislature never has to take a separate vote to raise the tax. As long as California’s consumer prices keep rising, the pump rate keeps rising with them.
What You Actually Pay Per Gallon
The state excise tax is only one slice of the tax load on California gasoline. As of early 2025, the combined taxes and fees on a gallon of regular come to about 90 cents, the highest in the country.4U.S. Energy Information Administration. Why California Usually Pays More at the Pump for Gasoline The pieces:
- State excise tax: 61.2 cents per gallon (the rate that adjusts each July 1)
- Federal excise tax: 18.4 cents per gallon, unchanged since 19935U.S. Energy Information Administration. Frequently Asked Questions – How Much Tax Do We Pay on a Gallon of Gasoline
- State sales tax on gasoline: roughly 10 cents per gallon, which floats with the pump price since it’s percentage-based
- Underground storage tank fee: about 2 cents per gallon
The national average for combined state fuel taxes runs around 28 cents per gallon, so California’s state-level taxes alone are more than double the typical state.4U.S. Energy Information Administration. Why California Usually Pays More at the Pump for Gasoline California’s cap-and-trade program and Low Carbon Fuel Standard add another estimated 5 to 8 cents per gallon on top of that, though the amount moves with carbon credit markets.
On a 15-gallon fill-up, the state and federal taxes alone account for roughly $13.50 of what you pay.
Diesel Has Its Own July 1 Rate
Diesel doesn’t follow the gasoline rate. The diesel excise tax rose to 46.6 cents per gallon on July 1, 2025, up from 45.4 cents.1California Department of Tax and Fee Administration. Fuel Taxes Diesel also carries an additional layer called Component B, a sales tax replacement rate, which brings the total diesel-specific state tax to 97.1 cents per gallon for the period starting July 1, 2025.6California Department of Tax and Fee Administration. Sales Tax Rates for Fuels Fleet operators feel that compounding quickly.
Where the Money Goes
SB 1 revenue flows into the Road Maintenance and Rehabilitation Account, a dedicated fund for state highway and local road work.7California State Controller. Road Maintenance and Rehabilitation Program FAQs The law carves out fixed annual allocations before splitting the rest:
- $400 million for bridge and culvert repairs
- $200 million for local agencies with voter-approved transportation taxes
- $100 million for the Active Transportation Program covering bike lanes and pedestrian improvements
- $25 million for freeway service patrol
- $25 million for local planning grants
- $7 million combined for transportation research at UC and CSU
After those set-asides, remaining funds split evenly between state highway maintenance and city and county road work distributed by formula.8California Legislative Information. California Code Streets and Highways Code SHC 2032 Half of the diesel excise tax increase goes into a separate Trade Corridor Enhancement Account for freight corridor projects.
If You Drive an Electric Vehicle
ZEV owners don’t buy gasoline, so they don’t pay the excise tax. Instead, California charges a Road Improvement Fee of $121 per year on all model year 2020 and later zero-emission vehicles at registration renewal.9California Department of Motor Vehicles. Registration Fees The fee doesn’t apply to the initial registration of a new ZEV bought from a licensed dealer.
Whether that flat fee matches what a gas-powered car pays is another question. A vehicle averaging 30 miles per gallon and driving 12,000 miles a year burns 400 gallons and generates about $245 in state excise tax at the current rate. The $121 fee covers less than half of that.