A Chevron station in Essex, California, is charging $9.69 a gallon for regular gasoline, according to data tracked by GasBuddy, as the state’s petroleum market watchdog warns of potential price gouging amid rising oil prices linked to the ongoing conflict in Iran.
The California Energy Commission’s Division of Petroleum Market Oversight (DPMO) said It’s “vigilantly monitoring” retail, wholesale, and spot markets, and will investigate reports of unfair practices or market manipulation. The agency noted that prices at some stations, including $8.71 a gallon at a Chinatown location in Los Angeles and $7.79 in Vidal Junction, are “not supported by current crude oil prices or gasoline futures.”
Gas prices nationally have increased roughly 30% since the U.S. And Israel launched attacks in Iran three weeks ago, coupled with Iran’s subsequent disruption of approximately 20% of the global oil supply. California, already burdened with the highest fuel prices in the nation, is experiencing a particularly acute impact.
The DPMO was established in 2023 to increase transparency in California’s petroleum market following two consecutive years of summer price spikes exceeding $6 per gallon. The state’s consistently high prices are attributed to a combination of factors, including state taxes and fees, environmental programs, a requirement for a cleaner fuel blend, and its relatively isolated petroleum market, relying on in-state refineries for 80% of its gasoline supply. This isolation makes the state particularly vulnerable to refinery outages and potential market manipulation.
A 2024 DPMO report found that, even after accounting for environmental regulations and taxes, Californians pay an additional 41 cents per gallon, with the largest portion of that difference attributable to industry profits. The report also attributed previous price spikes to refineries going offline without sufficient backup supply and “potentially manipulative trading” during those periods of constrained supply.
Jamie Court, president of the nonprofit Consumer Watchdog, argued that the widening gap between California and national gas prices since the start of the war is indicative of price gouging. “We understand they made 49 cents per gallon in January,” Court said, referring to refineries. “We know now that their margins are closer to $1.25 per gallon,” he added, citing analysis by his group and Oil Price Information Service data.
Chevron stated that the majority of its gas stations are independently owned and operated, allowing those businesses to set their own retail prices. “Those costs are generally determined by fundamental economic forces like demand, supply and competition,” said spokesperson Ross Allen, who also noted that crude oil prices, alongside California’s taxes and environmental fees, contribute to the high cost of fuel, potentially adding over $1.20 per gallon.
Valero, Marathon Petroleum, and Shell did not immediately respond to requests for comment.
The DPMO stated it has contacted stations exhibiting “excessive and disproportionate” pricing, including multiple locations in Los Angeles and San Bernardino counties, as well as Northern California, since the conflict began. The agency also encouraged consumers to compare prices between branded and unbranded gasoline, emphasizing that all gasoline sold in California must meet the state’s stringent emissions control and engine performance standards.
