SACRAMENTO (CBS SF) — California air quality regulators are disputing the accuracy of a new ad campaign claiming a hidden gas tax is set to go in effect January 1st that could add up to 76 cents to a gallon of gas in the state.

The ads by a group called the California Drivers Alliance, which is funded by the Western States Petroleum Association, instruct people to contact state officials to “urge them to put the brakes on the hidden gas tax.”

The California Air Resources board says the ads are misleading and refer to the state’s cap-and-trade program designed to reduce greenhouse gases and which goes into effect beginning in 2015.


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The program caps the amount of pollutant that can be emitted by companies, with the allocated limit sold to firms in the form of emission permits. Firms that exceed their limit can buy more permits from others that require fewer permits.

Gas wholesalers are expected to spend more on permits and pass along their increased costs to drivers at the pump.

On the other hand, fuel costs are falling and new cars are as fuel-efficient as ever.

The Air Resources Board said regulations could increase fuel prices anywhere from 4 to 19 percent, but that the per capita cost of gas is expected to fall from $1,437 in 2012 to $1,012 in 2020 – an annual savings of $400 per person, according to the San Jose Mercury News.

“It appears to be a case of the oil industry presenting incomplete information,” said David Clegern of the Air Resources Board told the Mercury News.

Gas prices are also expected to fall because of a boom in production, along with the state’s annual switch from summer-grade fuel to the winter version, which can evaporate in heat more quickly than the summer blend.

California’s groundbreaking cap-and-trade program, part of the state’s Global Warming Solutions Act, was signed into law by Gov. Arnold Schwarzenegger in 2006.

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