Newsom Disputes Analysis by USC Professor on Potential Rise in California’s Gas Prices

Michael Mische estimated that regular gasoline prices in California could rise by as much as 75 percent by the end of 2026.

California Gov. Gavin Newsom speaks during a press conference in Los Angeles on Sept. 25, 2024. Eric Thayer/AP Photo

The office of California Gov. Gavin Newsom on May 7 criticized an analysis by a University of Southern California (USC) professor on the potential impact of refinery shutdowns and state policies on gas prices.

Michael Mische, a professor at USC’s Marshall School of Business, had estimated regular gasoline prices could rise from an average of $4.82 in April 2025 to as high as $8.44 a gallon by the end of next year in a report released May 5. The report sparked concerns over the future affordability of gas in a state where prices are already among the highest in the nation.

Two Phillips 66 refineries in Los Angeles are set to close by the end of this year, and a Valero refinery in the San Francisco Bay area will shutter or restructure by April 2026, according to the companies. These and other factors could result in a potential 21 percent drop in refining capacity from 2023 to April 2026, said Mische.

“The collective consequence of the pending refinery exits to the Golden State is potentially devastating to California’s economic growth and status as the fourth largest economy,” said Mische in the report.

“The high operating costs, together with what many consider to be a hostile political and regulatory environment towards refiners ... create an inevitable ‘death spiral’ for the oil and gas industry. Consequently, refiners are exiting the Golden State.”

The professor included a series of recommendations to roll back regulations and entice refiners to stay in California.

Brandon Richards, deputy director for rapid response for Newsom’s office, accused Mische of “fearmongering for personal and professional profits” with his report.

“Mr. Mische fails to provide evidence to support his main claim that gas prices could increase by 33.6% by the end of 2025 and 75% by the end of 2026,” he told The Epoch Times in an email. “Instead, there are a few vague references to ‘models’ but no details about the model structure, the data used, or how these numbers were estimated.”

In a May 7 post on social media platform X in response to the study, Newsom’s press office also accused Mische of being “bankrolled by Saudi Arabia.”

Mische confirmed to The Epoch Times that he worked on a publicly disclosed project funded by the Saudi public investment fund from 2019 to 2021 that sought to diversify the Saudi economy away from petroleum.

“[It] had nothing to do with petroleum. It was the antithesis of petroleum,” he said. “I’m not an advocate of the oil and gas industry.”

For his latest analysis, Mische said he ran 20 to 30 different variations on models for future gas prices in California, and “in all instances, we had an increase in price.”

“The real issue is, the price is going to go up,” he said.

Mische also said he didn’t conduct the research for personal gain.

“There’s no sinister motivation here,” he said. “I didn’t go into it with any profit motivations or self-service.”

In an April 21 letter, Newsom directed California Energy Commission vice chair Siva Gunda to “redouble” the state’s efforts to work closely with oil companies to ensure a “safe, affordable, and reliable supply of transportation fuels, and that refiners continue to see the value in serving the California market, even as demand for fossil fuels continues its gradual decline over the coming decades.”