California Likely to Increase Gas Tax Despite Suggestions to Freeze the Raise in 2022

The state's governor has backed the idea of halting further tax hikes this year as the US faces decades-high inflation across all sectors of economy.

The California State Legislature has still not introduced a bill to suspend the gas tax increase from 51 to 53.9 cents per gallon, despite the Sunday deadline for adopting the proposal rapidly approaching. This means the tax hike is unlikely to be frozen this year, despite governor Gavin Newsom’s backing of the move, his spokesperson said.

"It is clear now that the Legislature will not act in time to provide that immediate, limited relief, but we look forward to working with lawmakers on the Governor’s proposal for direct payments to Californians wrestling with rising prices".

While the window of opportunity to prevent a further rise in the state already notorious for its high gasoline prices has passed, Newsom's office mulled compensating for it by introducing a rebate to owners of cars registered in California.

The average regular gas price remains around $4.13 per gallon, but in some areas is as high as $6.61 per gallon. Should the Legislature fail to freeze the increase, it will come into effect in July.

Just a year ago a gallon of gasoline cost $2.88, but the price soared amid surging oil prices prompted by the revival of global economies after the COVID-19 pandemic. That demand drove up prices of other commodities as well as sending inflation numbers to four decades-high.

Republicans in the California State Legislature proposed pausing the annual gas levy increase for 2022 back in January when the dire inflation situation was already clear. They suggested that road-building and other infrastructure projects cout be partially funded from the state's budget surplus to cover for the lack of tax increase this year. However, the bill failed to pass in March.

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