Even as drivers debate repealing California’s recent gasoline tax hike, an often-overlooked state program has quietly helped push fuel prices higher.
Dubbed the Low Carbon Fuel Standard, the program is designed to fight climate change by forcing oil companies to lower the “carbon intensity” of the fuels they sell in California.
For years, it had little effect on gasoline prices, tacking on an estimated 3 or 4 cents per gallon.
Over the last year, however, the program’s effect at the pump has been growing, due to a run-up in prices for a type of tradeable credit at the heart of the program. Although the fuel standard’s exact impact on retail gasoline prices is impossible to track, the Oil Price Information Service currently estimates it to be 8.5 cents per gallon.
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