Ready for a flashback?
Gas Sunday dropped to $3.07 a gallon at the Manteca Costco. Seven other locales were below $3.20 a gallon in Manteca including the Arco at Industrial Park Drive and South Main Street that came in at $3.11 a gallon.
It ‘s dropped below $3 a gallon in some spots in Stockton with the lowest being $2.96 a gallon at the Stockton Costco.
Eagle Feather Trading Post in Porterville near Fresno was reporting California’s lowest gas in Sunday at $2.85 a gallon.
Gas prices in much of the country has dipped below $3 a gallon.
California’s pump prices on Sunday averaged $3.42 a gallon.
It is the direct result of America’s shale oil boom and foreign producers forced to up output in a desperate move to retain market share so they can generate needed revenue. The more prices drop the more oil they have to sell to avoid their economies from backsliding.
This is great news for consumers and bad news for government. That means only one thing: Get ready for a push in both Sacramento and Washington, D.C., to add more taxes to a gallon of gas.
The drop in gas prices have given consumers — most of whom haven’t had a pay increase of consequence for years — a small boost in the pocketbook. Average California gasoline prices were $3.97 at this time last year. That savings of 55 cents a gallon can add up quickly. If you put 10,000 miles a year on your vehicle and get an average of 25 miles per gallon with combined city and highway driving that means you spend $220 less during the course of a year on fuel.
That’s bad news for politicians and multi-billionaires like Elon Musk of Tesla fame and Warren Buffet. Both billionaires invested heavily on energy prices soaring: Musk with his electric cars and solar endeavors and Buffet with his wind farms and fossil fuel portfolio. But don’t weep for either Musk or Buffet. Neither will lose much sleep over gas heading toward a price of $2.50 a gallon. Both have plenty of state and federal tax credits, tax deferrals, and outright subsidies to keep greenbacks flowing unabated.
And if the spigot started to turn toward the off position, they’ll do what they do best — convince politicians to rewrite the rules so government can manipulate the marketplace to make them prosper at everyone else’s expense.
The greenhouse gas targeted by Assembly Bill 32 is a prime example. In 66 days at the start of 2015, oil companies in California will need to start buying carbon tax credits to allow them to “pollute.” It’s all part of the Sacramento’s plan to reduce green house gas levels in California to 1990 levels by 2025 even though the Golden State currently has 9 million more residents than it did in 1990.
The oil companies — since they don’t print money like Uncle Sam — have made it clear they will pass on the cost to consumers. That is expected to initially translate into an additional 15 cents a gallon starting in 2015. Experts anticipate the cost per gallon to reach as much as 76 cents as the AB32 requirements keep ratcheting up.
You can take some solace knowing that part of the additional money you are paying has been earmarked to help pay for the high speed rail train and subsidize those that can afford $120 train tickets per person between San Francisco and Los Angeles.
But don’t think we’ll get away with paying ultimately only 76 cents more a gallon in hidden taxes on top of the 68.14 cents a gallon in taxes we already pay in California that’s second only to New York at 68.9 cents a gallon in taxes.
Sacramento and Washington, D.C. have been hit with a double whammy: Falling fuel prices triggered by the shale oil boom and increased fuel economy.
The U.S. Energy Information Agency has noted America’s annual gasoline consumption has been dropping steadily since 2007.
That means less tax has been collected specifically for freeways and other road work plus to subsidize mass transit.
And in California, it means less state sales tax as well.
Some have suggested equipping cars with global position units so the state can assess a per mile driven tax to pay for road construction and upkeep as well as subsidize mass transit. That, however, doesn’t address a drop in general sales tax.
Then there is the issue of people now being forced to drive more fuel efficient vehicles based on operating costs of which gas is the biggest chunk. Over the years Detroit auto executives as well as the Elon Musks of the world who benefit from fossil fuels being expensive have argued America needs a draconian gas tax like Europe to force consumers to switch to other energy technologies such as electric cars and ethanol fuel. The reason they make that argument is they have invested heavily — either on their own or with mandates aimed at their heads by the government — into alternative “green” technologies.
Of course, politicians will come to their rescue and impose new taxes. Elon Musk and Warren Buffet are too big to fail.
As far as the rest of us, we’re the 99 percent that serves as collateral damage to politicians’ efforts to make their cronies rich.
So enjoy sub-$3 a gallon gas while you can. Even if cheap oil continues to flow the additional taxes at the pump — hidden and visible — will go up in just a few months.
This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209.249.3519.