California Drivers Brace for Potential Mileage Tax and Refinery Closures

Frustrated residents warn state lawmakers to 'stay out of our pockets' as proposed per-mile fee could cost over $1,000 annually

Feb. 4, 2026 at 8:07pm

Got story updates? Submit your updates here. ›

Californians are voicing strong opposition to a proposed mileage tax that could replace the state's gas tax, potentially costing drivers an extra $228 to $1,026 per year. With gas prices already sky-high, locals who rack up significant miles on their cars daily are angered by what they see as another 'cash grab' by Democratic lawmakers facing a budget deficit. The situation is further complicated by the sudden closure of a major Valero refinery, which experts warn could drive gas prices even higher in the state.

Why it matters

The proposed mileage tax and refinery closures highlight the growing financial strain on California drivers, who are already grappling with some of the highest gas prices in the nation. This issue touches on broader debates around transportation funding, the transition to electric vehicles, and the state's ability to balance environmental regulations with the needs of consumers.

The details

The Democrat-backed mileage tax bill, Assembly Bill 1421, would replace the state's gas tax with a per-mile fee ranging from two to nine cents per mile, based on an average of 11,400 miles driven annually. This could cost drivers an additional $228 to $1,026 per year. Meanwhile, the sudden closure of Valero's 145,000-barrel-per-day refinery in Benicia, along with the departure of other refineries from the state, is expected to further drive up gas prices due to California's higher operating costs compared to the national average.

  • On February 1, 2026, the California State Assembly overwhelmingly passed the controversial 'road charge' bill.
  • On Saturday, Valero's Benicia refinery began powering down, four months earlier than planned.

The players

Mike

A bartender in Los Angeles who is frustrated by the proposed mileage tax.

Christian Cadenas

A construction worker in Los Angeles who drives over 100 miles per day in his large pickup truck and is outraged by the potential mileage tax.

Sophia

A waitress in Orange County who drives extensively for work and to care for her family, and is not surprised by the officials' actions that could further increase gas prices.

Mike Ariza

An oil expert who warns that California is in an 'unprecedented oil crisis' due to refinery closures.

Assembly Bill 1421

The Democrat-backed proposed mileage tax legislation that would replace the state's gas tax with a per-mile fee.

Got photos? Submit your photos here. ›

What they’re saying

“Get your hands out of my pocket. It should be unconstitutional. I'm not paying for the world, I pay for myself. Nobody wants you in our pockets.”

— Mike, Bartender (The Post)

“It's not fair, we shouldn't have to pay more. I'm outraged by it. This isn't a luxury for me, I have a family I have to take care of.”

— Christian Cadenas, Construction worker (The Post)

“I just assumed they would. Everyone's struggling pretty badly in this economy right now. They don't really care about that.”

— Sophia, Waitress (The Post)

“We are in an unprecedented oil crisis.”

— Mike Ariza, Oil expert (California Globe)

What’s next

The California Transportation Commission and state Transportation Agency will conduct research on the proposed mileage tax rates and collection methods, with the results potentially informing future legislative action.

The takeaway

The backlash from California drivers over the proposed mileage tax and refinery closures highlights the growing financial burden on residents, who are already grappling with high gas prices. This issue underscores the need for policymakers to balance environmental regulations, transportation funding, and the economic realities faced by consumers.