Suspending gas tax emerges as key issue in California gubernatorial race, as pump prices climb

Finding ways to lower gas prices in California amid the U.S. war with Iran has resulted in candidates in the state's gubernatorial race proposing suspending the gas tax or easing refinery regulations.

San Jose Mayor Matt Mahan, a more moderate Democrat running for California governor, said in a video posted on X on Friday that the state's high gas prices are “becoming an emergency for working families, and I think we ought to act like it.”

"Some experts say gas prices could go to $7 per gallon," Mahan wrote in the post. "That’s why we need a temporary suspension of our state’s gas taxes, which are the highest in the nation. California leaders say they care about working families. Let’s make them prove it with a temporary suspension of our gas taxes while gas prices remain so high.

California’s gas tax is 61 cents per gallon, which is the highest in the nation, the Los Angeles Times reported.

Meanwhile, former Los Angeles Mayor Antonio Villaraigosa called for an “immediate moratorium” on regulations that he said are “overburdening” California refineries and working families.

“These failed policies are not only hurting tens of millions of Californians, they are terrible for the environment because they have forced California to depend on imported foreign oil from the Middle East,” Villaraigosa said.

The average price for a gallon of regular gasoline in California on Tuesday was $5.542, the highest in the U.S., and more than 50 cents more than any other state, according to AAA. The national average for a gallon of regular gasoline was $3.71, up from the previous month’s average of $2.92.

California's gasoline prices are often among the highest in the U.S. for several reasons, including environmental rules that require a unique blend of cleaner-burning fuel. The state also relies mostly on crude oil imported from other countries – including Brazil, Iraq, and Guyana – which is processed at in-state refineries.

Last year, 61% of oil processed at California refineries was imported, compared to 23% that was produced in the state, according to California Energy Commission data.

“The truth is we have the highest taxes in the country and a $350-billion budget, and we ought to be able to pave our roads and enable working families to put food on the table,” Mahan said in an interview. “I just reject the notion that the sky is going to fall if we provide temporary relief to working families who are being pushed to the brink by a war that they didn’t ask for.”

He added that the state should suspend the fuel tax “for the duration of the war” in Iran, “or as long as gas prices are over $5 a gallon” in California. Mahan also called for “massive regulatory overhaul that brings down costs across the board,” including rules on refineries.

Villaraigosa said that if he is elected governor, he would “reform and overhaul” the California Air Resources Board, which enacts many of the state’s environmental laws, such as the low-carbon fuel standard and cap-and-invest program.

“We can no longer allow bureaucrats who live in a bubble – with no accountability for the harm they are causing our economy and our people – to have so much power over the lives of every Californian,” Villaraigosa said.

Mahan and Villaraigosa are the only two Democrats who have publicly called for cutting back regulations on the state’s oil and gas market.

For a long time, Republicans have supported suspending the gas tax and cutting regulations to lower prices at the pump.

Steve Hilton, a GOP gubernatorial candidate and former Fox News host, outlined a plan to lower California gas prices to $3 per gallon by cutting regulations such as the low-carbon fuel standard, which is a rule that requires cleaner-burning gas to reduce tailpipe emissions.

The other major Republican in the gubernatorial race, Riverside Sheriff Chad Bianco, supports suspending the gas tax, per his campaign website.

The current gas price spike is similar to 2022, when Russia invaded Ukraine and disrupted global oil markets.

California's jungle primary, in which candidates of all parties run on the same ballot and the top two head to the general election, is set for June 2.