Why Is Gas So Expensive in California?
Updated September 16, 2026
In EIA's weekly survey for the week of 2026-09-14, regular gasoline averaged $5.827 in California against $4.319 nationally, a premium of $1.508 per gallon (EIA). In AAA's state averages for September 15, 2026, California is the most expensive state (AAA).
$5.827 per gallon. EIA, week of 2026-09-14.
$1.508 per gallon in the same EIA week; $1.424 averaged over the last twelve months.
73.6¢ per gallon against an unweighted mean of 33.6¢ among the 50 states (Tax Foundation, 2026 edition).
$0.41 per gallon, the 2015-2024 average in DPMO's October 2025 report. Source.
California and U.S. gasoline prices over time
- A: February 2015: Torrance refinery fire
- B: October 2025: Phillips 66 Los Angeles last operation
- C: April 2026: Benicia cessation completed
EIA EMM_EPMR_PTE_SCA_DPG and EMM_EPMR_PTE_NUS_DPG, through 2026-09-14; retrieved 2026-09-16. Monthly means use identical weekly dates. Months with fewer than three paired weeks and the current month are excluded. Bands mark events, not measured price effects. EIA weekly retail gasoline. DPMO: Torrance event dating. EIA refinery closure dates. Phillips 66 filing. Valero filing.
Why the California market is different
Taxes
Two tax figures appear on this page and they count different things. The Tax Foundation total of 73.6 cents per gallon (Tax Foundation, 2026 edition) is the figure this site uses to compare states. DPMO's Exhibit A6 itemizes what it counted as of August 2025: gas tax $0.61, sales tax $0.15, and an underground storage tank fee of $0.02 per gallon. The federal excise adds 18.4 cents in every state. Source. Source.
Environmental programs and California-specification gasoline
California gasoline carries two program costs that most states do not. The Legislative Analyst's Office estimated in May 2025 that cap-and-trade adds about 23 cents per gallon at the $29.27 allowance price of February 2025, and would add 74 cents if allowances reached the price ceiling. DPMO's Exhibit A6 carries cap-and-trade at $0.23 and the Low Carbon Fuel Standard at $0.15 per gallon as of August 2025, and cautions that the LCFS figure assumes that 100% of the LCFS cost would pass onto consumers and therefore may not reflect actual real-world costs.
The state also requires its own blend. DPMO assumes that making gasoline to California's specification costs a constant 10 cents per gallon more than gasoline elsewhere, and adds that this assumption likely overestimates the additional cost of meeting California's more stringent fuel specification.
Source. Source.
An isolated refining market that is shrinking
EIA's July 2025 analysis points to the relative lack of logistical connectivity on the West Coast to other refinery hubs in the United States, such as the Gulf Coast
as the reason West Coast supply problems are hard to relieve. Two refineries have since stopped making fuel. Phillips 66 Los Angeles (139,000 b/d): Fuel production ceased in the fourth quarter of 2025; facilities idled. Valero Benicia (145,000 b/d): Refining operations ceased; phased idling completed by the end of April 2026. EIA put the pair at 17 percent of California refining capacity and 11 percent of the West Coast's, and recorded West Coast gasoline imports above 210,000 b/d on a four-week basis in late May 2025. As of its edition date California had 12 operating refineries with 1,499,171 b/d of capacity in the EIA Refinery Capacity Report 2026 edition, as of 2026-01-01; that count predates the Benicia shutdown. Source. Source. Source.
The unexplained remainder
After taxes, fees, program costs and its fuel-specification allowance, DPMO finds a gap it cannot attribute to any of them. Between 2015 and 2024, the mystery gasoline surcharge averaged $0.41 per gallon, costing Californians $59 billion.
Since 2015, it has ranged from 27 to 62 cents per gallon.
On the industry side: California gross gasoline industry margins increased by $0.35 per gallon relative to the rest of the U.S. since the surcharge appeared.
At the pump, DPMO describes the California-versus-rest-of-U.S. retail gap as moving from an average of $0.54 per gallon pre-2015 to an average of $1.23 per gallon post-2015 (in 2024 dollars)
. One caveat DPMO states itself: its comparison does not account for potential differences in ethanol blends.
California sells E10; most other states allow E15. Report dated October 2025. Source.
Questions people ask
Why is California gasoline so expensive?
In AAA's September 15, 2026 averages California is the most expensive state, and in EIA's survey it ran $1.508 a gallon above the U.S. in the week of 2026-09-14. The sourced explanations are higher state taxes, two carbon programs, a state-specific fuel blend, and an isolated refining system that has lost two refineries. No source on this page assigns a share of this week's price to each of them.
How much of the price is tax?
73.6 cents per gallon in state taxes and fees (Tax Foundation, 2026 edition), against an unweighted mean of 33.6 cents among the 50 states, plus the federal excise of 18.4 cents that every state pays. Source.
What does cap-and-trade add?
About 23 cents per gallon at February 2025 allowance prices, by the Legislative Analyst's Office's May 2025 estimate, rising to 74 cents only if allowances reached the price ceiling. DPMO's Exhibit A6 carries $0.23 per gallon as of August 2025. Source. Source.
What does DPMO mean by its unexplained price difference?
The part of California's premium over other states that remains after DPMO nets out taxes, fees, environmental programs and its fuel-specification allowance. Between 2015 and 2024, the mystery gasoline surcharge averaged $0.41 per gallon, costing Californians $59 billion.
On the industry side it reports: California gross gasoline industry margins increased by $0.35 per gallon relative to the rest of the U.S. since the surcharge appeared.
Source.
Will refinery closures raise prices?
Phillips 66 Los Angeles (139,000 b/d): Fuel production ceased in the fourth quarter of 2025; facilities idled. Valero Benicia (145,000 b/d): Refining operations ceased; phased idling completed by the end of April 2026. EIA's July 2025 analysis said the two represented 17 percent of California capacity and 11 percent of the West Coast's, that the region lacks pipeline links to other refining hubs, and that gasoline imports ran above 210,000 b/d in late May 2025. The sources describe capacity and imports; none quantifies an effect on retail prices. Source. Source. Source. This site does not forecast prices.
Corrections log
Corrections log, 2026-09-16: no corrections at publication.
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