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ABC Ignores Taxes Behind High California Gas Prices

     High gas prices are hurting a lot of people, but the impact is most painful for Californians.


     ABC’s March 16 “World News” featured a segment about the California economy and pointed out that California is experiencing the highest gas prices in the country.


     “The Golden State’s economy has sailed into the perfect economic storm,” ABC correspondent Mike Von Fremd said. “The economic slowdown is forcing California to lay off 20,000 teachers, counselors and librarians. Home foreclosure rates in southern California are up more than 80 percent over last year. And making things worse: the highest gasoline prices in the continental U.S., averaging $3.63 a gallon statewide, more than $4 for premium in Silicon Valley.”


     But there’s a wrinkle in the “World News” story that Von Fremd failed to mention. Gas prices are higher in California due to regulations and taxes, according to the Energy Information Administration.


     “The State of California operates its own reformulated gasoline program with more stringent requirements than Federally-mandated clean gasolines,” the EIA’s Web site says. “In addition to the higher cost of cleaner fuel, there is a combined State and local sales and use tax of 7.25 percent on top of an 18.4 cent-per-gallon Federal excise tax and an 18.0 cent-per-gallon State excise tax. Refinery margins have also been higher due in large part to price volatility in the region.”


     Journalists often fail to point out California’s 45.5-cent-per-gallon tax on fuel, the highest state gasoline tax in the nation, according to the American Petroleum Institute.


     “California prices are more variable than others because there are relatively few supply sources of its unique blend of gasoline outside the State,” the EIA Web site says. “California refineries need to be running near their fullest capabilities in order to meet the State’s fuel demands. If more than one of its refineries experiences operating difficulties at the same time, California’s gasoline supply may become very tight and the prices soar.”


     Alarming gas prices have often been the focus of the network news stories, as pointed by a 2007 Business & Media Institute report.