High gas prices don’t have to slow down climate change programs in CA

Ever since Trump’s war on Iran began, Californians have been watching gas prices jumped dramatically, forcing families to cut back on needs. It’s a stark reminder of the pitfalls of relying on volatile commodities to power our lives and businesses.

Yet in one of the most egregious examples of an arsonist crying at the fire, Chevron and other fossil fuel companies seized the moment to try to lobby against California’s climate policiesin an attempt to shift the blame for their own high prices.

As a market analyst who has spent more than four decades advising governments and businesses on energy issues, I have considerable experience in market manipulation. I can say with certainty that the oil industry’s claims that climate policy is the driver of high gas prices are false and dangerous.

Understanding why Californians pay a premium for gas and how the state can most effectively inoculate consumers from volatile fossil fuel prices is now more important than ever.

Oil is a global commodity. Geopolitical disruptions like we’re seeing now send prices soaring — which is great for oil company profits and terrible for consumers. While oil companies stand to make multibillion-dollar windfalls from recent events, Californians can expect to pay more not only for gas, but also for food, air travel and electricity.

The two most volatile components of our gas bills—crude oil prices and the margins oil companies charge—are controlled by the oil industry, not the state. California’s price premium over the rest of the country is a result of market concentration. A few firms – just five major refiners – control almost all of the country’s refining capacity. When global supplies tighten, this concentration gives these firms enormous pricing power.

While in the rest of the country prices have increased by approximately 102 cents since the start of the war, California has seen a jump of 120 cents. This difference is the market structure leading to an inflated price.

Unfortunately, this is not a new phenomenon. In fact, Californians have mysterious surcharges paid in the oil industry for nearly 10 years, in the amount of 59 billion dollarswithout adequate explanation. That’s one reason Gov. Gavin Newsom and the state Legislature created a new gas price transparency program in 2024 to prevent price hikes.

We’ve seen the power of refinery pricing in action during supply disruptions in the past. In fact, the biggest California-specific price spikes in the past decade have come from refinery failures: A 2025 fire at the Martinez refinery sent prices soaring 42 cents a gallonadded Valero closure in 2019 61 cents a gallon over 44 days, the 2015 ExxonMobil Torrance explosion cost California drivers nearly 2.4 billion dollars over 40 days and a 2012 power outage at an Exxon-Mobil refinery pushed up gasoline prices in California 48 cents just for one week.

California’s climate programs — such as cap and invest and the low-carbon fuel standard — account for less than 6% of gas price increases from 2019 to 2023. This is a small fraction of what a refinery accident can do.

Climate programs aren’t just one of the smallest items on the gas bill; they pay dividends that will help protect consumers from volatile prices in the future.

Since 2013 of California cap and invest program generated $34 billion in revenue and finances over 500,000 projects — zero-emission school buses, wildfire prevention, safe drinking water — all state-owned gross domestic product grew with a staggering 81%.

Over the next 20 years, this program is expected to generated $56 billion to benefit utility ratepayers.

The oil industry and its allies seek to divert attention from their own market power. California’s vulnerability to high gas prices comes from limited supply routes and a highly concentrated refining market.

And the oil industry – from which President Trump asked for $1 billion — is a key part of the system that drives these incredible price spikes, while being the sole beneficiary of them.

After all, the only real hedge against high gas prices and volatile oil prices is to use less oil. That’s exactly what California’s climate programs help consumers do. That’s what a faster, clean energy transition actually provides — real protection from oil chaos, not more exposure to it.