Lawmakers Demand Probe into ‘Mystery Surcharge’ on Gas

California has the second-highest fuel prices in the nation, but taxes aren’t solely to blame for rising gasoline costs. For the past few years, Californians have been paying a “mystery surcharge” on gas that amounts to about 20-plus cents a gallon—a combined $17 billion since 2015—and lawmakers want to get to the bottom of it.

Nineteen Democrats, including two South Bay legislators, sent a letter this week to state Attorney General Xavier Becerra asking him to investigate the inexplicable surcharge, which came to light in a 2017 report ordered by the California Energy Commission.

In the letter, Assemblyman Ash Kalra (D-San Jose) and state Sen. Jim Beall (D-San Jose) and their colleagues note that the surcharge hovered around 2 cents a gallon from 2000 to 2014 but spiked in 2015 following a refinery fire in Torrance. Last year, the charge soared to about 24 cents per gallon.

University of California, Berkeley, professor Severin Borenstein chaired the committee that authored the report, which found that even accounting for the state’s gas tax and the cost of complying with greenhouse gas reduction targets failed to explain that 24 cents to the gallon charge. Since the Southern California refinery blaze, which happened a few months after Borenstein and his team began work on the report, he notes that prices have “exhibited a continuous and unexplained differential to the rest of the country.”

Authors of the report said they lacked the authority to demand data from private companies that could shed light on the matter, so they urged state policymakers to commit resources for further analysis.

More than a year later, legislators are acting on that advice.

“The high cost of gas in California and a mysterious charge are not new concerns to legislators or consumers,” Beall said in an emailed statement. “Unfortunately, we have not had the ability to force oil companies to provide answers to the questions we in the legislature were asking. Requesting investigation is the logical next step in getting to the bottom of what is really driving higher prices at the pump for Californians.”

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @jennwadsworth.

16 Comments

  1. > Requesting investigation is the logical next step in getting to the bottom of what is really driving higher prices at the pump for Californians.”

    And then when these exhibitionist rodeo clowns “get to the bottom” of gasoline pricing, they can regulate it just like the did for PG&E.

    And then . . . the price of gasoline will be FAIR!

    Twenty-five cents a gallon! It used to be twenty-five cents a gallon! So, that’s what it should be.

    Probably, we should have a commission for everything in California that has a price so we can be sure that ALL prices are fair.

    Personally, I think the price of bicycles is way too high. It the price of bicycles was $4.99, more people could afford bicycles and more people would use the bike lanes.

  2. My bet is that it’s the fossil-petro companies doing like the cable companies and phone companies do, which is to tack on a bunch of fake surcharges and make them look like they are mandated by the government. This is yet another symptom of late stage capitalism, corporatists grasping at whatever they can.

    Good that Kalra and Beall are noticing and asking the AG to look into it.

    • For once I agree with you both. I can tell SCC Resident is a democrat and politician and friend of Kalra and Beall. You see how Dems and Reps have common causes? bubble is a Rep.

    • Late stage capitalism, most of those surcharges were tacked on by parasitic big government socialist politicians looking for a free ride. With out capitalism to pay for it, socialism is just another starving third world dictatorship.

      Really SCCR with all your wonderful US dollars you should go live in one for a while maybe you’ll stay!
      Try Venezuela.

      • Gunn, I think you’re confused. What’s happening is that the corporatists see how effective it is to tack on one-sy-two-sy charges for a couple cents here, another dollar there, and so they start making up their own stuff. It’s _not_ required by the government, but the corporation makes it look like it is. And all it does is line their executives’ already gilded pockets.

        Speaking of other countries, the Nordics seem to be doing quite well with a form of socialism. Why you gotta go look in the toilet? Venezuela’s problems stemmed from a reliance on, then a sustained drop in oil prices.

        • I agree with SCC on this. Socialism and dictatorship is not the same. The problem is some dictators have used socialism to get close to people and their votes. Once they are in power, they focus on benefitting themselves not the people. For example, Castro lived and died pointing the finger st others. When he died, it was discovered he was a very rich guy. He was all he criticized in others.

        • Mr. SCCR I think you are confused as so called “corporatist” can raise the price of the product according to supply and demand. Surcharge is at best supposed to be a temporary solution to a new cost.
          The restaurant I pointed out put a surcharge for new labor costs imposed on them buy socialist engineers in the government requiring a higher minimum wage. This added no value to my meal and since it will now cost me another 2 bucks I won’t go as often reducing the profit margin of the restaurant requiring them not to hire more people cut back hours or lay some one off. In retaliation I cut the tip to the waiter and the waiter will report no gain in taxes to the government resulting in a net loss to the government, the waiter, the restaurant and me.

          Now I surprised you didn’t mention France as your economic model, but things seem to be flying apart there as well as Venezuela. The cost of carrying hundred of thousand of imported freeloader has become to much of a burden even for the usually passive French socialist.

          Scandinavian Socialism is a myth and they are very much part of Free Market Capitalize. Until recently they are or were very a homogeneous society’s with very high taxes to pay for all that social generosity, but that’s starting to change for all the same reasons its changing all over the EU.
          “Freeloading Uninvited” immigration or FU has soured the good nature of these people.

          So why did I look in the toilet for another failed socialist country, because that what happens when very successful country like ours or Venezuela fall for, “I want everything to be free at someone else’s expense”. The idea that Venezuela has failed because the price of oil fell is ridicules, it fell everywhere.
          Venezuela failed because its dictators nationalize the oil company’s lined their pockets with the revenue as they did with everything else they could grab. The people that made things work, for lack of a better word “Corporatist” were stripped of their assets and threated with arrest. Anybody with any brains or knowhow packed up and left.

          Venezuela currently has the largest know oil reserves in the world, hopefully as it transforms back to free market capitalism the painful lesson will have been learned, and a free people will again profit from that resource and other resources and return a productive example of a working society.

    • > This is yet another symptom of late stage capitalism,

      All things considered, SCRezzy, I think I’ll take late stage capitalism over late stage hunter-gathering.

      Producing food provides a better chance of eating regularly than fighting with a zillion other foragers.

  3. Perhaps they should check on the price of beach front property while they are at it. It seems to me there are nothing but rich, white, democrats that own it all and that’s just not fair.

  4. Great idea while your at it lets audit all those surcharges on our phone bills, water bills, electric bills, license fees for car registration & drivers license, tickets to movie’s and ball games. We got a 3% surcharges at a restaurant last Sunday,
    I rather like that as it came out of the tip!

  5. Is this another smoke screen ? I don’t see our new California gas taxes and DMV registration fees at work hear in the IE.

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