California’s gas tax rose to 63.4 cents per gallon on July 1, marking a 2.2-cent increase that keeps the state’s fuel tax the highest in the nation.
The increase is automatic, triggered by a law passed in 2017. Senate Bill 1, the Road Repair and Accountability Act, ties the gas tax to California’s Consumer Price Index, requiring annual adjustments to account for inflation. Under this mechanism, the tax on gasoline increased from the previous rate of 61.2 cents per gallon, while the diesel tax rose by 1.6 cents to 48.2 cents per gallon.
These automatic adjustments have reshaped California’s fuel tax landscape over the past nine years. When SB 1 took effect, the gas tax stood at 27.8 cents per gallon—meaning the current rate has more than doubled since 2017, according to the Assembly Republican Caucus.
Why the Tax Exists and What It Funds
Senate Bill 1 was the first increase in California’s state excise tax on gasoline since 1994. The 2017 law was designed as the largest transportation investment in state history, projected to raise over $5 billion annually for road and infrastructure repairs, according to the Metropolitan Transportation Commission.
The tax revenue supports maintenance and rehabilitation of aging roads and bridges across California. SB 1 created the Road Maintenance and Rehabilitation Program, which receives an estimated $3.24 billion annually from fuel tax revenue, with funds distributed to state highways, local streets, and safety improvements statewide.
The July 1 adjustment is the ninth consecutive year the tax has increased due to inflation. As electric vehicle adoption grows in California, the state’s reliance on gas tax revenue faces long-term questions, though the automatic inflation adjustment continues to boost the rate annually.
Sources
- ABC10 — Confirmed the 63.4 cents per gallon rate effective July 1, 2026.
- The Desert Sun — Reported the 2.2-cent increase from 61.2 cents and diesel tax rise to 48.2 cents.
- NBC 7 San Diego — Verified the increase amount and effective date.
- Assembly Republican Caucus — Documented that the gas tax has more than doubled from 27.8 cents in 2017 to 63.4 cents in 2026.
- KSBY News — Stated that total state taxes and fees per gallon reached $1.20 starting July 1, 2026.
- California Fuels & Convenience Alliance — Noted the increase reflects the state’s annual inflation adjustment and rose from 59.6 cents.
- Sacramento Bee — Reported the automatic CPI-tied hike and its purpose to fund road repairs.
- Metropolitan Transportation Commission — Identified SB 1 as the largest transportation investment in California history.
- California Road Charge — Documented that SB 1 passed in 2017 and includes future cost-of-living adjustments.
