CA gas prices are dropping despite new tax, expert says. Here’s what you’ll pay
Gas prices in California were expected to rise in July due to the state’s new gas tax increase and fuel policy changes.
However, that hasn’t been the case so far.
According to Patrick De Haan, head of petroleum analysis at GasBuddy, gas prices are actually dropping in the Golden State.
Despite the excise tax ticking up from 59.6 to 61.2 cents per gallon and the rollout of the Low Carbon Fuel Standard, De Haan said, fuel costs for drivers have declined.
“Folks that may have been reading more of the extreme articles would have expected that gas prices would have shot up, with politicians saying we were going to see $8 gasoline,” De Haan told The Sacramento Bee on Thursday, July 17. “But we’ve actually seen gas prices drop.”
If you are commuting or traveling in California, here’s how much you can expect to pay at the pump:
Why are California gas prices dropping?
De Haan said California gas prices have been dropping, offsetting the impact of the new gas tax.
“The increase from the new gas tax has been offset by developments in the Middle East, which had originally pushed the price of gas up,” he said.
In June 2025, conflict in the Middle East had caused fuel prices to spike across the United States.
Drivers saw regular gas prices jump by seven to 15 cents per gallon, while diesel rose by 10 to 20 cents.
With tensions easing in the region, gas prices have started to drop.
“Californians are technically paying more per gallon due to the tax and (Low Carbon Fuel Standard), but it’s been kind of an invisible increase, because wholesale gas prices have gone down,” DeHaan said. “People have not visibly seen the impact.”
Will California gasoline prices continue to drop?
De Haan said the biggest factor that could drive gas prices up this summer is whether California experiences any refinery outages.
“That’s been the recurring theme over the last couple of years,” he said.
If there is an unexpected refinery outage, it could temporarily strain supply and send prices climbing.
If no major issues arise, De Haan said, gas prices should “either remain stable or slowly decline for the rest of summer.”
“Gas prices typically peak at the beginning of summer around Memorial Day weekend,” he said. “So California may have already seen its worse price at the pump this summer.”
What are current fuel costs in California?
As of Thursday, July 17, the average price for a gallon of regular unleaded gasoline in California was about $4.51, according to AAA.
While that is roughly 15 cents less than June’s average, it is still a dollar more than the national average of $3.16.
Around this same time in 2024, the statewide average was approximately $4.73.
Where to find the cheapest gas near me?
According to AAA, the most affordable fuel could primarily be found in parts of Northern and Southern California, with the average price for an gallon of regular gasoline dipping as low as $4.23 in Modesto and $4.27 in El Centro and Yuba City.
As of Thursday, July 17, these were the average prices per gallon for regular gas at metropolitan areas around California:
- Bakersfield: $4.47 per gallon
- Chico-Paradise: $4.47
- El Centro: $4.27
- Fresno: $4.58
- Hanford-Corcoran: $4.34
- Los Angeles-Long Beach: $4.50
- Madera-Chowchila: $4.56
- Merced: $4.39
- Modesto: $4.23
- Napa: $4.83
- Oakland: $4.57
- Orange County: $4.45
- Redding: $4.33
- Riverside: $4.35
- Sacramento: $4.46
- Salinas: $4.73
- San Bernardino: $4.39
- San Diego: $4.58
- San Francisco: $4.69
- San Jose: $4.52
- San Luis Obispo-Atascadero-Paso Robles: $4.90
- San Rafael: $4.62
- Santa Barbara-Santa Maria-Lompoc: $4.48
- Santa Cruz-Watsonville: $4.69
- Santa Rosa: $4.75
- Stockton-Lodi: $4.35
- Vallejo-Fairfield: $4.52
- Ventura: $4.54
- Visalia-Tulare-Porterville: $4.50
- Yolo: $4.45
- Yuba City: $4.27
Where can I find cheapest gas prices in my area?
GasBuddy is a price-tracking website designed to help motorists find the cheapest gas prices in their areas.
You can search for the most affordable gas stations in your area on the GasBuddy website.
This story was originally published July 18, 2025 at 7:49 AM with the headline "CA gas prices are dropping despite new tax, expert says. Here’s what you’ll pay."
