State must explain mystery surcharge we pay for gasoline

With California gas prices rising, it’s time for state officials to solve the mystery of an unexplained gas surcharge motorists have been paying for at least four years.

Industry experts are blaming the recent price hike on refinery production challenges in the state and the Sept. 14 attack on a major Saudi oil facility. But that’s on top of an estimated 20-30 cents a gallon price bump Californians have been paying since 2015 that cannot be explained by the state’s taxes and special fuel blends to fight pollution and climate change.

The mysterious surcharge is costing California families an estimated $1,800 a year. They deserve to know whether that money — roughly $4 billion a year — is going to further enrich oil companies at the expense of consumers.

The California Energy Commission asked an independent panel of energy market experts to look into the issue in 2015. But the committee was not given sufficient resources or authority to get to the root of the problem. UC Berkeley Professor Severin Borenstein, who chaired the committee, says that given that billions a year are at stake, it’s essential that investigators have the power to compel oil companies to account for their pricing practices.

More recently, the Energy Commission concluded in a May memo that market manipulation may be a factor in the state’s high gas prices. Gov. Gavin Newsom responded by approving a five-month study to look more deeply into the issue. That report is expected to be released later this month.

Meanwhile, whatever the cause of the mystery surcharge, there’s little doubt that California has long had some of the highest gas prices in the nation. But there’s a good reason for it: Higher taxes and the state’s pollution-cutting fuel blend that was adopted in 1996.

While it’s true that California’s gas taxes are among the highest in the nation, numerous studies have shown that the health and environmental benefits outweigh the costs.

Californians pay about 10 cents a gallon for its fuel blend. Another 20 cents a gallon goes to the state’s low-carbon fuel standard and cap-and-trade program. The two climate change-related programs are essential for reducing greenhouse gas emissions The state’s low-carbon fuel standard, for example, has helped reduce carbon pollution by 38 million tons since it was enacted in 2010. The environmental programs are essential if the state is going to meet its 2030 goal of cutting greenhouse gas emissions to 40 percent below 1990 levels.

But Californians shouldn’t have to put up with higher prices at the pump because of market manipulation. It’s essential that Gov. Gavin Newsom get to the bottom of the unexplained gasoline surcharge and determine whether the oil industry is unfairly profiting at Californians’ expense.