New 3.5 Cent Gas Tax Now in Effect; Average Prices Dip

The average price of a gallon of self-serve regular gasoline in San Diego County dropped Monday for the seventh time in eight days, falling nine-tenths of a cent to $4.039.

The average price is 7.3 cents less than one week ago, but 5.2 cents more than one month ago and 30.6 cents higher than one year ago, according to figures from the AAA and Oil Price Information Service.

The average price has fallen 7.7 cents over the past eight days, including 1.1 cents on Sunday. The falling prices follow an 11-day streak of increases totaling 14.6 cents.

The cheapest gas in Rancho Bernardo is $3.89 per gallon at the ARCO on the corner of Rancho Bernardo Road and Bernardo Center Drive, according to GasBuddy.com.

The dropping pump prices follow a large decrease in wholesale gasoline prices, according to Jeffrey Spring of the Automobile Club of Southern California.

A 3.5-cent per gallon increase in the gasoline excise tax that went into effect Monday is expected to be reflected in Tuesday's average price. The California Board of Equalization is required to adjust the excise tax rate by March 1 each year to ensure revenue neutrality under a law that went into effect in 2010.

Sales tax revenue decreased in 2011 and 2012 because of dropping gasoline prices, resulting in the required increase in the excise tax to make up for the sales tax loss, according to Jaime Garza of the California Board of Equalization.

Gasoline sales tax revenues fund local government programs while the state excise tax on gasoline funds highway and mass transit projects throughout California.

-City News Service