Los Angeles 'Gas Tax Holiday' Proposed Amid Surging Fuel Prices

LOS ANGELES, CA — Residents in Los Angeles facing inflation and an unrelenting pandemic may find a little bit of relief at the gas pump this summer. Under Gov. Gavin Newsom's budget proposal, the state's summer gas tax hike may not take effect.

Newsom unveiled his budget plan on Monday and introduced his "$523 million dollar gas tax holiday."

“We’re going to backfill it in terms of the tax itself to transportation projects so that there’s no direct impact to investments,” Newsom told reporters.

The inflation adjustment on gasoline prices was set to befall Californians in July.

Last year, the gas tax in California increased by 51.1 cents on July 1. An analysis by Stillwater Associates last year found that Golden Staters were paying around $1.18 cents per gallon in taxes and fees, KTLA reported.

The Golden State is not only the most populous state, it's also one of the most expensive places to live. No one feels this more than LA’s motorists as the state continues to have the most expensive gas in the nation.

"Oil prices are climbing again due [to] civil unrest in a couple of oil producing countries, but that impact seems to be tempered by concerns about what the Omicron variant of Covid may do to gasoline demand," Jeffrey Spring, spokesman for the Automobile Club of Southern California, said in a statement.

Average prices for regular gasoline in California in January surged to $4.65 per gallon, just 10 cents under the highest recorded average price of $4.71 on Nov. 27, 2021, according to AAA on Wednesday.

In Los Angeles, the average price for regular gas was $4.68 this week, about the same as the area’s highest recorded average price recorded in November, according to AAA on Wednesday.

The average national price was $3.30 on Wednesday, AAA reported.

"Southern California drivers started the new year paying the highest average price ever in the region for January; the statewide average today being 30 percent higher than a year ago when it was $3.26 per gallon," Spring said Thursday.

While most Californians face gas prices that hover uncomfortably close to the $5 mark, one gas station along an iconic stretch of state Route 1 through Big Sur boasted what could be the most expensive fuel price in the nation: A station in Gorda had a price of $7.59 per gallon.

California's gas prices are shockingly high, and experts suggested that strong oil demand, low supply and the rising cost of oil was to blame for the skyrocketing price at the pump.

"What's been increasing prices is the imbalance in the market," Patrick De Haan, the head of petroleum analysis at GasBuddy, previously told SFGate. "Supply is still 10-15 percent below pre-Covid levels, while demand is back to pre-Covid levels and at some points this summer hit all-time high levels."

• Here are some tips offered by AAA to get better gas mileage.

• Avoid "jack rabbit" starts, rapid acceleration and hard braking. These actions can lower fuel economy by 15 to 30 percent.

• Avoid excessive idling. A car engine typically consumes a quarter to a half gallon of fuel per hour when idling.

• Avoid commuting during rush hour, the busiest traffic time.

• Time stoplights to maintain momentum and avoid stop-and-go driving.

• Use cruise control.

• To warm the engine, drive instead of idling.

• Use a prepaid fast pass on toll roads.

• For manual drivers, shift gears efficiently by upshifting as soon as possible. When coming to a stop, use the brakes instead of downshifting.

• Watch your speed. Fuel economy peaks around 50 mph in most vehicles. Reducing highway speeds by 5 to 10 mph can increase fuel economy 7 to 14 percent, according to AAA.

A worsening surge in prices for gas, food and rent bedeviled Californians throughout the holiday season.

Inflation jumped at its fastest pace in nearly 40 years last month, a 7 percent spike from a year earlier that increased household expenses and ate into wage gains and put pressure on President Joe Biden and the Federal Reserve to address what has become the biggest threat to the U.S. economy.

In the Golden State, prices rose sharply for cars, gas, food and furniture as part of a rapid recovery from the pandemic recession that was fueled by vast infusions of government aid and emergency intervention by the Fed, which slashed interest rates. As Americans ramped up spending, supply chains were squeezed by shortages of workers and raw materials.

The Labor Department reported Wednesday that the consumer price index — its measure of inflation excluding volatile food and gas prices — jumped 5.5 percent in December, the largest such increase since 1991. The CPI rose 0.5 percent overall from November, down from 0.8 percent the previous month.

With California's revenues at an all-time high, Newsom proposed a budget that would scale back taxes to offset the effects of inflation.

"We have the capacity to invest in our growth engines, invest in the future, as well as make sure that we prepare for the uncertainties that the future presents," Newsom said.

The Associated Press contributed to this report.

This article originally appeared on the Los Angeles Patch