Sales Tax Exemption for Bunker Fuel

Statutory Data Reporting Requirement. Chapter 442 of 2023 (AB 543, Gipson) extended a longstanding sales tax exemption for certain purchases of bunker fuel, also known as maritime fuel. The exemption applies to fuel that water common carriers buy in California and use after they reach their first out-of-state destination. Chapter 442 directs our office to report three performance indicators:

• The average monthly maritime fuel price at all domestic and international Pacific seaports.

• The average monthly maritime fuel price at California seaports.

• Maritime fuel deliveries at California seaports.

This report fulfills that statutory requirement.

Maritime Fuel Prices. According to Ship & Bunker, the average price of marine gas oil (a major type of maritime fuel) at the ports of Los Angeles and Long Beach was $781 per metric ton in October 2025. In the same month, the average prices per metric ton of marine gas oil in the Americas and in the Asia-Pacific region were $837 and $786, respectively.

Maritime Fuel Deliveries. To estimate California deliveries of residual fuel oil (a major type of maritime fuel), we combine data from a couple of sources. As suggested by the California Department of Tax and Fee Administration, we use nationwide estimates of residual fuel oil consumption from the Energy Information Administration and assume that California’s share of fuel consumption is proportional to its share of U.S. port tonnage. This approach yields an estimate of 8.6 million barrels for fiscal year 2024-25.