California’s gasoline prices have surged by 40 cents over the past two weeks, largely due to refinery shutdowns that are squeezing fuel supplies across the state.
Currently, the average price stands at $4.582 per gallon, up from $4.463 a week ago and significantly higher than $4.182 just a fortnight ago, as reported by the American Automobile Association.
Experts in the energy sector attribute this increase directly to the limited capacity in refineries.
The Valero refinery in Benicia, a key provider in Northern California, is currently not in full operation. This situation has followed a series of significant closures, including Phillips 66’s Los Angeles facility, leading to a steady decline in California’s gasoline production capacity.
Historically, California imported roughly 6% of its oil from other countries in 1982; today, that figure has shot up to about 70%.
Oil specialist Michael Ariza expressed concerns about Valero’s influence on the region, noting that, in the Bay Area, only two of five refineries are actively generating gasoline, jet fuel, or propane. With Valero’s operations halted, other facilities like ConocoPhillips in Rodeo and Marathon in Martinez are pivoting to biodiesel production.
In cities such as San Francisco and San Rafael, gasoline prices exceed $4.80 per gallon, placing them among the highest in the state.
Looking ahead, prices may continue to climb this year. A study from the University of California, Davis, warned that unless the market sees significant change, California’s gas prices could rise by as much as $1.21 per gallon by August 2026 as the impact of refinery closures bites deeper.
Brat Gafarov, a researcher at UC Davis, noted that in 2000, California’s gas prices were about $0.25 higher than the national average. By 2025, that gap could expand to $1.50.
Currently, the national average for gas is around $2.93 per gallon, meaning Californians are paying over $1.50 more than the rest of the country.
This surge in prices coincides with Governor Gavin Newsom’s participation in a high-profile conference in Germany, even as fuel costs soar back home.
Farmers in Northern California are particularly worried, as rising diesel prices threaten their harvests. One farmer near Chico remarked that the increase will have a significant impact on their operations.
With average gasoline prices at about $4.42 per gallon in Butte County and diesel prices at approximately $4.76, farmers are feeling the pinch.
Many farmers, struggling with soaring costs for diesel and gasoline essential for growing crops, fear they may not be able to harvest. As one farmer put it, “If there’s a shortage, we won’t be able to gather our crops.”
The result of these escalating fuel prices could ultimately ripple through to consumers, increasing the cost of staple goods like nuts, honey, and agricultural products.
Lawmakers are sounding alarms about the broader implications. Republican state Senator Suzette Martinez Validares stated, “California is at a breaking point. Refineries are closing, supplies are dwindling, and families are paying more every day.”
As gas prices rise, proposals for a mileage-based tax are emerging, aiming to charge Californians based on how many miles they drive instead of how much gas they purchase. Lawmakers argue that this could make up for declining gas tax revenue as electric vehicles become more popular.
Currently, California has the second-highest gas prices in the country after Hawaii, and critics suggest a new mileage tax could exacerbate costs at a challenging time.
