California’s average pump price came within 4.4 cents of the 2022 all-time high this month, and while a war in Iran pushed crude higher, two refinery closures and a hostile policy climate explain why California pays far more than everyone else
The Price Of A Dawn Patrol
Every surfer in California knows the arithmetic. Load the board, fill the tank, drive the coast looking for a swell that might or might not show. A road trip from Santa Cruz to Rincon, or from Huntington to Trestles and back, has always cost something. This autumn, it costs a lot more. In the week of October 5, the average price of gasoline in California across all grades reached 6.227 dollars a gallon, according to Energy Information Administration data reported by California Today in its analysis of how California gas prices fell 12 cents after coming within 4.4 cents of the 2022 record. That was the second-highest reading since 2000.
Prices eased slightly the following week, to 6.104 dollars, and AAA’s regular unleaded average stood at 6.24 dollars on October 15. Even so, Californians were paying 1.77 dollars a gallon more than the national average. That gap is not a law of nature. It is the product of decisions.
The National Spike
Part of this autumn’s increase is global. Brent crude rose above 120 dollars a barrel in early October amid the war involving Iran, and Governor Gavin Newsom has blamed the national spike on federal policy, writing that the war has sent gas and diesel prices soaring across the country. That is true as far as it goes. Every state has felt higher crude prices. But no state has felt them like California, and the reason lies closer to Sacramento than to the Strait of Hormuz.
Two Refineries Gone
California’s fuel market is an island. The state requires its own special blend of gasoline, and few refineries outside California produce it. That makes the state unusually dependent on its in-state refineries, and unusually vulnerable when they close. In October 2025, Phillips 66 stopped processing crude at its Los Angeles-area refinery, with a capacity of around 139,000 barrels a day. Valero began idling its Benicia refinery in the Bay Area, around 145,000 barrels a day, earlier this year, with closure slated by the end of April. Together, the two removed roughly 284,000 barrels a day of refining capacity.
Reporting from The Center Square, republished by the San Joaquin Valley Sun under the headline Valero begins shuttering Bay Area refinery, will import fuels, noted that Benicia alone supplied around nine percent of California’s gasoline and that the two closures together could cut the state’s gasoline production by about a fifth in less than a year. Valero has said it will import gasoline to meet its supply obligations. Benicia’s mayor expects the site to become a tank farm for imported fuel.
Why Refiners Leave
Refiners do not abandon profitable markets lightly. California’s has become one of the most hostile environments in the country for the business. The state has imposed some of the strictest environmental rules anywhere, created new oversight powers for energy regulators, floated penalties on refiner profits and set a policy direction openly aimed at phasing out gasoline-powered cars. Faced with heavy compliance costs, political hostility and a shrinking long-term market, companies have made the rational decision to stop investing and close.
Supporters of those policies argue they protect public health and the climate. Those are legitimate goals. But a policy that drives refining out of the state does not stop Californians from burning gasoline. It simply moves the refining elsewhere, imports the fuel by tanker and charges drivers more for the privilege.
The Tax Layer
Taxes add another layer. California’s gasoline excise tax rose to 63.4 cents a gallon on July 1, 2026, a 2.2-cent increase under the state’s automatic inflation adjustment. Earlier reporting estimated that state taxes and fees, including cap-and-trade and low-carbon fuel standard costs, add roughly 1.30 dollars a gallon, compared with 20 to 30 cents in many Southern and Midwestern states. California Today notes that the tax increase alone does not explain most of the price gap. But taxes and regulatory costs are part of the structural premium Californians pay every day, before any refinery closes or any war begins.
Who Really Pays
High fuel prices are not an inconvenience for the wealthy. They are a tax on working people who must drive: construction workers, farmworkers in the Central Valley, delivery drivers, nurses on night shifts, and yes, the surfers and surf shop employees who live inland because they cannot afford the coast. A family in Fresno or Riverside spends a much larger share of its income on fuel than a tech executive in Palo Alto with a Tesla and a home charger. Policies sold as progressive can land hardest on exactly the people they claim to protect.
The Free Market Alternative
There is a better approach. Allow refiners to operate under predictable rules rather than shifting political threats. Reconsider California’s unique fuel blend requirements, which wall off the state from the national market. Let pipelines and import terminals expand to bring in supply when in-state production falls. Cut or suspend fuel taxes when prices spike, rather than raising them automatically every July. And let consumers, not regulators, decide how quickly to switch to electric vehicles, through prices and innovation rather than mandates.
Surfers understand something politicians often forget. You cannot command a wave. You can only read the conditions and position yourself to ride what comes. Energy markets work the same way. When Sacramento tries to command the outcome, it gets empty refineries and six-dollar gas. When it respects the conditions, supply follows demand and prices fall. The next time you fill up on the way to the break, remember who set the conditions.