As gas prices in California continue to climb amid escalating tensions with Iran and the state’s transition to summer-blend fuel, a state lawmaker is proposing a temporary pause on the gas tax to provide relief to drivers.
Assembly Bill 1745, introduced by Assembly member Jeff Gonzalez of Indio, would suspend California’s motor vehicle fuel tax for one year.
The bill, introduced February 9, is designated as an urgency statute, meaning it would take effect immediately if passed by a two-thirds vote of the Legislature.
Currently, Californians pay about 61 cents per gallon in state gas taxes — the highest in the nation.
Karen Castellano holds up a gas pump at the Los Feliz 76 Station. Carlin Stiehl for California Post
Republican Freshman Assembly member Jeff Gonzalez. AP
California Gov. Gavin Newsom smiling among a crowd of people.
Under existing law, California imposes taxes on each gallon of motor vehicle fuel removed from a refinery or terminal rack, entered into the state, or sold in the state.
AB 1745 would suspend the imposition of those taxes for one year.
“Californians are hurting under the weight of our state’s affordability crisis. Families are paying more for groceries, housing, and especially fuel, and they need some breathing room,” Gonzalez told the California Post. “Suspending the state gas tax for one year would provide immediate relief at the pump, and the lost revenue would be responsibly backfilled through the General Fund so critical infrastructure projects remain on track.”
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The measure also includes consumer protections.
The bill requires that any savings from the tax suspension be passed directly on to drivers at the pump. Businesses that fail to do so could face penalties for unfair business practices. Gas stations would also have to show on receipts how much tax would have been charged if the suspension were not in place.
Lawmakers say “in order to immediately lower gas prices and provide relief to California motorists, it is necessary for this act to take immediate effect,” citing affordability as a major issue.
“Affordability should not be a partisan issue. I hope my colleagues on both sides of the aisle will join me in prioritizing Californians.” Gonzalez told the Post. The constituents in my district sent me to Sacramento to fight for them and lower their cost of living, and that is exactly what I am doing.”
California currently has the highest average gas prices in the nation. According to AAA, drivers in the state are paying an average of $4.63 per gallon. Hawaii follows at $4.40, Washington at $4.35, Oregon at $3.91, Nevada at $3.70, Arizona at $3.25, Pennsylvania at $3.13, and Vermont at $3.00.
Chevron gas station sign displaying prices. Getty Images
Gov. Gavin Newsom. Debra L Rothenberg/Shutterstock
Gas prices at a Los Angeles 76 gas station with Regular at $5.399, Plus at $5.599, and Premium at $5.799 per gallon. Carlin Stiehl for California Post
The proposed tax suspension comes as global oil markets react to geopolitical instability. U.S. oil prices recently rose 7%, while Brent crude increased 8%. Earlier this year, oil prices had already climbed 17%.
“This will quickly translate into higher prices at the pump for American drivers,” Christine Romans, senior business correspondent, told NBC News. “Looking at it this way, a $1 rise in crude oil prices generally means up to two and a half cents more for a gallon of gasoline. So, quick math, a $10 spike in oil would be up to 25 cents more for a gallon of gasoline.”
In addition to global market pressures, California is transitioning to its annual summer-blend gasoline — a formulation designed to reduce evaporation in warmer temperatures but which is more expensive to produce. Refineries often conduct maintenance during the switch, tightening supply and contributing to seasonal price increases.
Supporters of AB 1745 argue that with California’s cost of living roughly 11% above the national average — driven largely by housing costs more than 50% higher than the U.S. average — temporary gas tax relief could provide meaningful short-term financial relief to working families.
The bill will now move through the legislative process, where it will require bipartisan support to meet the two-thirds threshold needed for passage as an urgency measure.