Siphoning $20 Billion out of California Drivers- Hidden Surcharge and Taxes found in Gas Prices

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California drivers pay some of the highest gasoline prices in the nation. A UC Berkeley professor, Severin Borenstein, has discovered a “mystery surcharge” has been added to gasoline for the last four years, causing gas prices to skyrocket, and costing consumers over $20 billion.

The surcharges began in 2015, when the refinery explosion in Torrance caused what was expected to be a temporary spike in gas prices, according to Borenstein. However, the surcharge remained ever since.

“Starting in 2015, they were about 40 cents above where you would expect them to be in 2015. And in 2016, ’17, and ’18, they were between 25 and 30 cents higher than what you would expect,” said Borenstein. “In total, that amounts to paying an extra $20 billion in gasoline since February 2015.

“It’s a payment that’s not going to the government, it’s going to the sellers. Where in the distribution chain it’s ending up, we don’t know. It could be it’s going to refiners. It could be that it’s going to the middle men who buy and sell gasoline along the way. The pipeline owners, the distributors, the retailers, all of them, or some of them could be getting some of that $20 billion. And it could be that it’s covering a legitimate cost, but we should find out what that extra cost is, because it wasn’t there for the previous 15 years.”

So where’s the $20 billion? No one knows, but In January, 19 state legislators sent a letter to AG Xavier Becerra asking him to lead a formal investigation into the matter.

Borenstein estimates that since 2015, each California driver has spent about $500 on the mystery surcharges, which amounts to $11 million per day, and $4 billion per year.

“If that extra cost is due to some government regulation or policy, we need to look into whether that is something we can alter in a way that we don’t have to pay more for gasoline,” he said.

The other option is that local government is well aware of the charges and the funds are being spent on local issues of some sort. Either way, that’s a lot of money to be floating around, unaccounted for.


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