Gas price surge positively impacting consumption

Bay City News

July 1, 2007

Rising gas prices in California has led to less activity at the pumps, according to a California State Board of Equalization report.

Californians used 27.5 million gallons less in the first quarter of 2007 than in the same period last year, the report said.

While Californians used slightly more gasoline in March, the gains were not enough to offset steeper drops in February, according to the study.

"This is the fourth consecutive quarter that Californians pumped less amid rising gas prices," said Betty T. Yee, Board of Equalization chairwoman.

March figures went up by only 750,000 gallons, and January also showed minor increases, Yee said. But February's figures brought down the quarterly figures, with consumption dipping by 31.6 million gallons.

Over the past five years, Californians have used an average of 15.7 billion gallons of gasoline annually, according to the report. During the 2006 calendar year, Californians consumed 15.83 billion gallons, down from 15.94 billion a year earlier.

The first quarter of 2007's average pump price of $2.81 was 28 cents above prices during the first quarter of 2006, the report said. The higher prices generated approximately $860 million in sales tax during that quarter, an estimated $83 million more than the first quarter of 2006.

The Board estimated that nearly twice as much sales tax is generated annually by higher gasoline prices than five years ago.

In 2006, sales tax revenues from gasoline sales were estimated to be $3.2 billion, while 2002's gasoline sales generated $1.7 billion. The State's excise tax, 18 cents collected on every gallon, has remained relatively stable, according to the Board.

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