Fact check: Why is California's gas so high

1. The stark warnings: Could gas really hit $8–$10 a gallon?

Legislators and some commentators have sounded an alarm that California retail gasoline could reach $8–$10 per gallon if current trends continue, citing falling crude production, refinery shutdowns, and growing reliance on imports. Those warnings rest on a combination of observed declines—state oil production down from 468,000 to 168,000 barrels per day over a decade—and modeling of supply shocks when refining capacity falls sharply ^[1]. The claim functions as a high-end scenario rather than a fixed prediction, intended to dramatize the potential consequences of multiple simultaneous disruptions.

2. Refinery exits: The immediate supply shock driving price risk

Multiple reports document that two major California refineries are slated to close, representing roughly 17–18% of state refining capacity, and that effect is amplified by the West Coast’s limited connectivity to other U.S. refinery hubs. The Energy Information Administration flagged this capacity loss as elevating the risk of price volatility and higher pump prices regionally, because displaced demand cannot easily be met from other domestic refineries ^[2]. Analysts in local press also estimate price impacts that range from modest increases to several dollars per gallon depending on how closures and shipping adjustments play out ^[4].

3. Declining in-state crude production worsens the problem

Over the last decade California’s crude output has fallen from about 468,000 bpd to 168,000 bpd, shrinking the pool of local feedstock for refineries and increasing dependence on imported crude or shipments from other regions. This structural decline heightens vulnerability when refineries close because remaining plants have fewer nearby supply options, increasing logistical cost and time to substitute feedstocks, which can raise wholesale and retail gasoline prices ^[1]. The combination of lower production and fewer processing slots concentrates market power and raises exposure to international price swings.

4. Political responses: Stabilize by boosting production or subsidize refineries?

Governor Gavin Newsom has framed recent moves as stabilizing California’s gas market by signing legislation aimed at increasing oil output in places like Kern County and defending the state’s energy strategy, asserting progress on prices ^[3]. In contrast, some legislators argue the state should act to prevent refinery shutdowns directly—reports indicate talks to pay hundreds of millions to keep a Valero plant open, showing willingness to use public funds to maintain capacity ^[5]. These competing approaches reveal an underlying policy choice between incentivizing production and underwriting bottlenecked refining infrastructure.

5. The numbers at the pump and what they mean today

News reporting in September 2025 pegged California averages in the mid-$4 per gallon range—around $4.62–$4.65—well above the national average cited by critics, and substantially higher than nationwide levels reported contemporaneously ^{[1] [3]}. Those averages reflect both higher wholesale margins tied to regional refining tightness and state-specific factors such as fuel formulation requirements and distribution constraints. While the current figures are not in the extreme scenario band ($8–$10), they show why stakeholders fret that further capacity loss could materially raise prices and volatility.

6. Who’s pushing which narrative—and why it matters

Different actors press different explanations: legislators warning of catastrophic price spikes may emphasize closures and foreign dependence to justify emergency interventions or subsidies, while the governor highlights legislative steps to increase domestic output to claim stabilization ^{[1] [3]}. Media and industry reports about negotiating large payments to prevent closures suggest a financial rationale for keeping refining jobs and tax bases intact ^[5]. Each framing aligns with potential agendas—regulatory critique, political positioning, or protecting local economies—so the public debate mixes technical supply analysis with advocacy.

7. Forecasts, uncertainty, and what to watch next

Analysts provide a wide range of projected impacts—from a few cents to several dollars per gallon—depending on whether refineries stay open, alternative supply routes ramp up, or demand falls further ^[4]. The key near-term indicators to watch are: whether payments or subsidies succeed in keeping refineries operational, changes in California crude output, and how quickly alternative supply chains (imports or pipeline adjustments) can respond. Because the West Coast has limited spare refining connectivity, shocks tend to amplify price moves more here than in other U.S. regions ^[2].

8. Bottom line: High prices are structural but policy choices can alter the path

California’s above-average gas prices result from a combination of shrinking local supply and lost refining capacity, not a single cause; recent reports and federal analysis converge on that conclusion while differing on remedies ^{[1] [2]}. The dire $8–$10 scenario is a warning that depends on multiple failures aligning—continued refinery exits, no effective substitution of supply, and persistent strong demand—while intermediate outcomes remain plausible. Policymakers face trade-offs between subsidizing capacity, encouraging production, or accepting higher prices as refining economics and environmental policies evolve ^{[5] [3]}.