Keeping California Gas Prices Stable Amid Shaky Supply Will Be a Challenge, Regulator Says

With production hobbled by a refinery fire, energy officials cite the need to maintain imports to keep inventories from shrinking.

A woman fills her car up with gasoline in Los Angeles on July 1, 2025. John Fredricks/The Epoch Times

With California’s gas prices on the rise amid uncertain supplies, the state’s oil industry watchdog is stressing the need to maintain inventories to avoid price spikes at the pump.

Since Aug. 15, the state’s retail gasoline prices have risen by about 16 cents per gallon, with Southern California recording the highest increases. Summer volatility on the Los Angeles spot market has created upward pressure on prices that will be felt for the next several months, the state Energy Commission said in a statement.

In a Sept. 16 market update sent to Gov. Gavin Newsom and Democratic leaders, the Division of Petroleum Market Oversight detailed plans to work with the oil industry to keep gas prices from spiking.

“Price stability will depend on market participants’ continued advance preparation through maintaining adequate inventories, ordering sufficient cargoes, and avoiding reactive spot market behavior,” Division Director Tai Milder said in his letter.

California’s refinery output has suffered again this year, the watchdog agency reported.

“Based on multiple sources, it appears that there will be production shortfalls from in-state refiners in the coming months because of planned and unplanned maintenance,” Milder stated. “This is also the time of year when California has been more vulnerable to retail gasoline price spikes.”

In February, a large fire at the PBF Energy refinery in Northern California halted gasoline production. The refinery has since partially restarted but does not expect to reach full production until the end of the year, according to Milder.

Prices at the pump rose in California following PBF Energy’s shutdown. California retail gas prices peaked at an average of $4.97 per gallon in April, far lower than in 2022, 2023, and 2024, according to the agency.

Prices on spot markets, where wholesale gasoline is traded, peaked in the spring but have since decreased and stabilized.

The state received high levels of gasoline and blending chemicals in March, May, and June, which kept gas prices stable through the spring and summer. The state requires a special blend of gasoline during warmer months to reduce impacts to the environment.

The oil industry’s spot market in Los Angeles has posted higher prices for October and November delivery, according to Milder. Reports of higher pricing also come from California’s two other spot markets, he reported.

California needs to import the same amount of gasoline from other countries as the year continues, and maintain healthy inventories of blending components, Milder said.

The Chevron El Segundo Refinery near Los Angeles on June 4, 2025. John Fredricks/The Epoch Times

The agency anticipates switching to winter blend gasoline after Oct. 31, the usual transition date.

Milder encouraged Californians to shop around for the cheapest gas, including “unbranded” or generic gasoline, which meets the same state standards as branded gasoline.

The watchdog agency, created by California Democrats in 2023 in response to record prices at the pump the previous year, is the nation’s first state agency designed specifically to oversee, investigate, and create policy recommendations for a state’s oil industry.

The agency has the power to refer any cases of alleged “price gouging” to the California Attorney General’s Office, but has not yet filed civil or criminal actions against any company.

Last month, the state’s energy commission, which oversees the agency, placed a five-year pause on the program to penalize oil industry profits. The break was intended to allow the agency more time to study the industry and ensure an affordable supply of gas for consumers.

A Chevron gas station near Los Angeles on June 1, 2025. John Fredricks/The Epoch Times

California regulators are working with other state agencies and the oil industry to limit the impact of refinery maintenance on prices. The agency is also continuing to monitor the variables that impact gasoline prices, including potential import tariffs, other planned and unplanned refinery outages, weather events, and trends in the market.

State legislators are also working to boost oil production through bills such as Senate Bill 237, which waives certain environmental review requirements for new oil wells in Kern County and expedites permits stalled by litigation for nearly a decade. The bill passed the Legislature on Sept. 13 and now awaits a signature from the governor.