Lawmakers, oil industry worry about gas prices, shortages

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(The Center Square) – Under a cloudy sky, highway traffic noise from State Route 99 within earshot, 76 gas station manager Diksha said she is feeling the pain at the pump.

“I go fill up my tank at Costco,” Diksha, who goes by a single word for her entire name, told The Center Square at her 76 station in Modesto, a city 90 miles east of San Francisco. “But it’s still too much to fill up. It’s like $80 for two or three days, and that’s a lot. Before, it was $80 for a week or a week and a half.”

On Tuesday, the average price of gas in California was $6.11 per gallon, according to AAA’s gas price tracker. That’s well above the national average of $4.49.

While gas hovered between $6.29 and $6.69 at some gas stations in the agricultural heart of the Golden State, the average price in some counties got even higher. In Mono County on Tuesday, gas hit $7.07 a gallon, while Inyo County saw prices around $6.36 a gallon. By comparison, the average price of a regular gallon of gas on Tuesday was $6.31 a gallon in San Francisco, $6.17 in Los Angeles County and $6.14 in San Diego County.

Prices at Diksha's 76 station started at $6.29 a gallon for regular unleaded.

“In California, it’s too much. Out of California, it’s like $4,” Dinksha said. “I’m glad I don’t have diesel. Diesel is like $8.” (AAA reported the average for diesel in California on Tuesday was $7.75 a gallon.)

Experts from the oil and gas industry recently told California lawmakers that because of long-standing policy that saw more of the state’s unrefined petroleum imported into California rather than extracted here, the ongoing conflict with Iran is creating a bottleneck in the state's oil supply.

“It’s a real challenge for California drivers,” said Jim Stanley, director of media relations for the Western States Petroleum Association.

“Unfortunately, that is the result of decades of state policy that has made it really hard and really expensive for oil and gas companies to operate," Stanley told The Center Square. "So there really isn’t a silver bullet or a lever the state can pull to bring down prices.”

According to the U.S. Energy Information Administration, the country refined 16.3 million barrels per day through May 15, 80,000 barrels less per day than the weekly average one week prior. Refineries across the U.S. operated at 91.6% of their maximum capacity that week, and gasoline production decreased the same week – averaging out to roughly 9.3 million barrels that week.

“Our members are very focused on doing what it takes to meet the energy needs of Californians,” Stanley said. “That includes producing as much crude here in California as we can, refining as much as we can. Whenever there’s a supply crunch like what we’re seeing now, prices tend to rise, and we have to compete on a global market for that fuel.”

According to previous reporting by The Center Square, a number of refineries in California have closed, putting the number of active refineries at 13 as of 2024.

However, since that time, some refineries have closed, including Phillips 66's facility in the coastal Wilmington portion of Los Angeles and a Valero refinery in Benicia in the San Francisco Bay Area. Research from the Energy Institute at University of California, Berkeley's Haas School of Business states that California's oil refineries are closing, in part, because of increased environmental regulations. 

The state's remaining operational refineries are located in Los Angeles; Richmond, which is near San Francisco, and in Kern County, according to previous reporting by The Center Square. 

While no one could answer how many barrels of unrefined oil California has left, lawmakers are concerned that the dwindling supply from foreign exporters of oil could cause outright gas shortages. One lawmaker told The Center Square about a concern that the situation in Iran could make California’s gas problems even worse.

“We have to acknowledge that there is an international conflict,” Assemblymember Rhodesia Ransom, D-Stockton and author of a 2026 bill on E85 fuel, told The Center Square. “It definitely is a security issue, because not being able to access a vital fuel is really a security issue for California. So I’m very concerned about this.”

So far, at gas stations on one of the main commercial arteries of California’s highway system, there are no gas shortages yet.

“Right now, we don’t have any shortages on that,” Diksha, the gas station manager, told The Center Square on Tuesday.

Corporate representatives from large gasoline companies, such as Chevron and 76, did not respond to The Center Square on Tuesday.