Consumer Watchdog: 5 Ways To Lower California Gasoline Prices, Which Are $2 More Than US Prices In Bay Area

LOS ANGELES, March 12, 2026 /PRNewswire/ -- Consumer Watchdog President Jamie Court released the following statement on California gasoline prices:

The war in Iran has driven up gasoline prices based on the increased price of crude oil, but that's not the whole story for California's $5 plus per gallon gasoline.

The gap between California and US gasoline prices has been growing for weeks to $1.60 more per gallon, according to the latest EIA data. The usual gap is about $1 to $1.10 per gallon. AAA shows the gap at $1.75 on daily data. This is the price spike Consumer Watchdog warned legislators about weeks ago, before the Iran war, based on the California Energy Commission not using its powers to keep two Northern California refineries running. 

The price gap is even more pronounced in the Bay Area – showing the downed refinery and the failure to tap inventories is driving the problem. Gas prices in Oakland and San Francisco today are $5.60 as opposed to $5.38 per gallon in Los Angeles.

With the national price at $3.57 per gallon that means Northern California drivers are paying more than $2 more per gallon than US drivers.

This California gas price spike is caused as much by the Energy Commission's inaction as it is by Iran's closure of the strait of Hormuz. We called for hearings three weeks ago, and it's time Senate Energy Committee Chair Ben Allen and Assembly Chair Cottie Petris Norris obliged.

If the state is motivated, we can at least curb the gap between US and California prices to take the edge off the Iranian bump at the pump.

1. The CEC needs to use the tools it was given under special session legislation in 2023 to write a resupply regulation ASAP. It's inexcusable that it's been two and half years since CEC was given the power to issue the rule under SBX1-2 and it's failed to act. The resupply regulation would have required PBF and Valero to maintain supplies with their refineries down in the North. The CEC keeps moving the goal post on when it is writing the regulation, but the legislature must insist the time is now.

2. The CEC needs to create a minimum inventories regulation authorized in 2024 under ABX2-1. This requires refineries to maintain minimum inventories for moments like now when there is only one functional refinery in Northern California, Chevron's. The governor called a special session to have his rule authorized, and like the resupply regulation, the rule making hasn't begun. 

3. The CEC needs to give us a straight answer as to why the supposedly sufficient inventories in Northern California after the refinery outages are not blunting the price spike. Our February 19^th letter warned "Valero notified the CEC a year in advance of plans to shutter Benicia by April 2026, but then started shutting down certain key units at its Benicia refinery this month. Valero announced the change on its fourth quarter investor call in January, claiming it was idling its refinery in February. The CEC has the power to demand that Valero keep its refinery online through April, but has failed to use it." In response, the CEC said, according to Politico, "the early idling shouldn't impact supply in the near term. 'Valero has offered assurances to the CEC that it will make available an adequate amount of resupply to account for any shortages caused by the scheduled maintenance activities during the first several months of this year, which is what triggered their earlier-than-expected idling of refining operations,' CEC spokesperson Niki Woodard said in a statement.'" If there is ample inventory, why is the gap between US and CA prices at $2 in the Bay?

4. We need to bring back the price gouging penalty. Wars are opportunities for oil companies to profiteer and California has shelved the prime tool it has in its arsenal to fight back: the price gouging penalty. The governor went soft on the refiners and now California drivers are paying the price. It's time to put the penalty back on the table. Data from the last three years, produced under SB 1322 (Allen), shows California oil refiners profits, while moderating under the new transparency reforms, are still among the highest in the nation. Their average annual gross refining margins were $1.01 per gallon in 2023, 70 cents per gallon in 2024, and 75 cents per gallon in 2025. 2026 threatens to put their profit margins over a dollar per gallon again if the price gouging penalty doesn't go back on the table. California oil refiners are not going anywhere if such a rule is enacted. Refinery CEOs consistently referred to the California market as a strong market during 2026 shareholder results calls. Valero CEO Lane Riggs: "We'll continue to operate [our] Wilmington [refinery]. It's a good asset and a good market." Mike Worth, CEO Chevron: "We have a very strong downstream position there…I would argue advantage, really, versus the rest of the competitors in California." Marathon Petroleum Chief Commercial Officer Rick Hessling: "We certainly see the closure [of the Phillips 66 LA refinery] as a significant tailwind for us…. And you know, we always used to say…that the region was short one refinery. Well, now it's short several refineries." 

5. We need to encourage two new pipeline projects bringing refined gasoline into the state. The Western Gateway Pipeline (Phillips 66/Kinder Morgan) and Sun Belt Connector Pipeline (ONEOK) offer the best hope for competition in California's market where 4 in-state refiners make 98% of the gasoline. The in-state refiners don't like the projects. The Western Gateway pipeline, slated to be open by 2029, could be a game changer in terms of trimming price volatility and narrowing big price spikes. Lawmakers should support the idea and state regulators should expedite permitting. Most of the pipeline already exists but needs reversing to bring gasoline into California rather than take it out as it does now. A Phillips 66 pipeline running from Borger, Texas to St. Louis will be reversed to allow Midcontinent barrels to move into the Western Gateway. New pipeline will need to be built between Borger, Texas and Pheonix, Arizona. From Pheonix, product will be delivered by reversing existing pipeline to deliver to Colton, California and then be distributed. The pipeline's reversal will enable delivery of up to 200,000 barrels of refined fuels to California daily and substantially make up for the absence of 284,000 barrels per day of crude processing capacity supplied by Benicia and Phillips 66's refinery in Los Angeles.

SOURCE Consumer Watchdog