The price of a gallon of gasoline in California could potentially increase by as much as 16 to 76 cents per gallon on Jan. 1 under a new state regulation to reduce greenhouse gas emissions.

The state's Air Resources Board is responsible for carrying out the provisions of a 2006 bill passed by the state's legislature that expanded the state's cap-and-trade program to include gasoline and diesel fuels for the first time ever. Consumer advocacy groups such as the Drivers Alliance have said prices will increase as a result and labeled the measure a "hidden gas tax." The alliance released the price increase estimates.

A spokesman for the resource board told Sacramento's KXTV that he doesn't expect a dramatic price spike.

Assembly Bill 32 set an absolute limit on greenhouse gas emissions and set up the cap-and-trade system that requires oil manufacutrers to pay a fee for emissions. Gasoline and diesel fuel suppliers would likely pass along the increased cost to consumers, some argue.

The increased revenue would provide funds to create a Greenhouse Gas Reduction Fund accessible to state legislators for programs that would reduce vehicle-caused carbon-dioxide emissions.

Originally posted on Automotive Fleet