Aaron Cantu
|Capital and main
How to save on gas as California prices continue to rise
With gas prices soaring across California, GasBuddy’s Patrick de Haan shares some simple tips drivers can use right now to save money on gas.
This article was created by Capital & Main. Posted here with permission.
In mid-March, as an unusually early heat wave gripped the West and the price of a gallon of regular gasoline soared to nearly $6, Californians were enduring the effects of a problem that has dogged the state for years: dependence on climate-warming oil priced on global markets.
A record amount of imported gasoline arrived by the end of the month, cooling prices a bit. Much of it was shipped before the Iran war disrupted global supplies. But prices are likely to remain high simply because supply is so low. The average price on April 15 was 30 cents higher than a month earlier, according to the American Automobile Association.
The California Energy Commission said California is in the midst of a difficult transition to an economy based on clean energy. Increased use of electric vehicles and more efficient gasoline-powered vehicles have led to a decline in demand for refined fuels, and last year saw the lowest amount of gasoline pumped in more than 20 years, excluding 2020, when the pandemic reduced driving.
Some refineries in California have said they plan to shut down because they can’t make enough money due to reduced demand for their products. The 100-year-old Phillips 66 refinery in Los Angeles closed last year, and Valero Energy’s refinery in the Bay Area city of Benicia is scheduled to cease operations this month. The two refineries account for nearly one-fifth of California’s crude oil refining capacity.
As global oil supplies tighten due to the Iran war, the country is importing refined products from overseas to ensure it has enough fuel. But California got a lifeline from a surprising source. Fuel made from Russian oil is pouring into the state, even though the proceeds are being used to finance the country’s ongoing war with Ukraine.
The United States, Britain and the European Union have imposed sanctions on Russian oil and punished institutions that did business with blacklisted tankers or companies, or bought oil at prices above the cap, while other countries, including India, Turkey and China, have expanded their purchases from 2022 onwards.
Through the so-called “refining loophole,” the United States has been importing fuel made from Russian crude oil refined in third countries. For the past decade, California’s largest foreign refinery supplier of gasoline and blendstock has been Reliance Industries’ Jamnagar refinery complex in western India.
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California companies have been exploiting this loophole since the beginning of the Ukraine war. Swiss-based commodity trading company Glencore PLC, which owned a terminal in Long Beach until 2023, was the largest buyer, followed by Phillips 66, Swiss energy trading company Gambar Group, Chevron Corp. and Plains All-American Pipeline, according to shipping data analyzed by DataDesk.
In 2025, more than 9 million barrels arrived via this loophole. Six cargoes carrying 149,916 barrels arrived by March. The imports coincided with rising gasoline prices in the state.
In a comment to Capital & Main, a spokesperson for the California Energy Commission said the agency does not have legal authority to restrict imported fuel by origin, nor does it track the origin of crude oil. The U.S. Treasury Department, which is imposing sanctions, did not respond to questions.
Refined product imports, measured in total barrels, from South Korea and the Bahamas (which are rerouting refined products from U.S. Gulf Coast refineries) will exceed imports from India starting in 2025. But South Korea, which receives most of its oil through the closely contested Strait of Hormuz, recently banned exports to conserve fuel for domestic use.
India processed near-record amounts of Russian crude after the U.S. Treasury lifted sanctions on oil already at sea in March to bring down global oil prices. U.S. Department of Energy Secretary Chris Wright called the move “realistic” in comments to Capital & Maine. On April 17, the Treasury Department extended sanctions relief for another month.
But refined fuels made from Russian oil could continue to flow into California “as long as the Strait of Hormuz remains closed,” said Isaac Levy, team leader for Europe, Russia policy and energy analysis at the Center for Energy and Clean Air Research. Imports from California have already “sent hundreds of millions of dollars to the Kremlin’s war chest,” Levi added.
California relies on gasoline from overseas because there are no U.S. pipelines that bring domestic fuel to the state (although two are proposed). The law requires gasoline in the state to meet strict pollution control requirements, so-called California reformulated gasoline blendstock for oxygen blending. Because CARBOB is expensive to produce, very few refineries around the world produce it. The proposed bill would allow refineries to pay a sales fee on non-CARBOB gasoline to prevent price gouging.
California Energy Commission Vice Chair Shiva Gunda said at a Feb. 18 hearing that if gasoline demand continues to decline, “it’s not a question of if (more refineries) are going to shut down, it’s a question of when.” But he added that the country would be fine as long as “the market can safely rely on global refining capacity.” However, it is less elastic.
Last year, global sources of refined fuels helped California avoid severe price increases. When PBF Energy’s Martinez refinery in the Bay Area caught fire in February 2025, shutting down operations for a month, gasoline supplies tightened and the price of a gallon rose. But the state’s Office of Petroleum Market Watch said the situation stabilized after imports arrived at ports in Long Beach and the Bay Area.
“The higher prices indicate a shortage of gasoline on the market, which has attracted additional gasoline imports,” Gigi Moreno, the watchdog’s chief economist, said in a December presentation.
Within two weeks of the closure of the Martinez refinery, two tankers loaded with gasoline departed from the Jamnagar refinery complex and arrived at the Port of Long Beach’s Olympus terminal in March 2025, according to data from the analytical platform Kpler. Around the same time, another shipment arrived at the Martinez terminal.
A shipment of Russian crude oil arrived in Jamnagar in 11 licensed tankers weeks before the refined product was to be exported to California. The largest supplier to Jamnagar that year was a Russian company.
20 years of missed opportunities
In 2000, a year after California gasoline prices peaked at a then-record $1.62 a gallon, a task force recommended that refineries stockpile fuel to prevent price spikes. He also said states should encourage people to drive less. Despite trying to do so, neither happened.
The first failure was the driving restrictions. The report notes that “changes in housing development to emphasize and encourage pedestrians and public transportation” could reduce gasoline use. However, by 2020, drivers were adding more miles to their vehicles due to the continued “paving” expansion of highways.
California’s plan to reduce greenhouse gas emissions by 2030 assumes that driving will decline significantly. But the state is far from achieving that goal. The California Department of Transportation said planned investments in facilities such as crosswalks and bike paths will help reduce emissions by getting people out of cars, but many projects are not yet completed.
More than $5 billion in revenue from the state’s cap-and-trade emissions program is earmarked for public transportation and housing densification, but it “really takes a very long time” to bring about change, said Jeannie Wardwaller, director of transportation advocacy at Fearless Advocacy and a former California Department of Transportation official.
Another key recommendation from the 2000 report, that refineries stockpile a month’s worth of gasoline to “cope with high prices,” went unimplemented for more than 20 years. These efforts began in 2022, but have now stalled.
Two laws passed under the direction of Gov. Gavin Newsom allow the California Energy Commission to cap refiners’ profit margins and require refiners to maintain minimum fuel inventories to prevent price spikes.
But the commission announced last year that it would “de-prioritize” the cap law for five years and has yet to promulgate rules for refineries to stockpile fuel. The Western States Petroleum Association, a powerful industry lobbying group, argued there was not enough capacity to both store the fuel and supply it to the state.
“If there were minimum inventory rules, this problem wouldn’t have happened,” said Jamie Cote, president of the advocacy group Consumer Watchdog. Without such rules, the state is also unable to address refinery profit margins. He estimates the profit margin is more than $1.50 a gallon, higher than in any other state.
The California Energy Commission said in an email to Capital & Main that it would deprioritize capping refinery profits and focus on other things, including potential rules to ensure refineries have enough fuel on hand when they can’t produce it. A spokesperson said the company is collecting data to “determine whether these rules have a clear benefit to consumers.”
The only bright spot since 2000 has been electric vehicle sales. Philip Verleger Jr., a longtime oil industry analyst who has written that expensive fossil fuels are a major driver of the switch to electric vehicles, said higher gas prices could further accelerate car purchases.
But while California seeks to sidestep President Donald Trump’s legal efforts to reduce the financial attractiveness of clean cars, it also proposes to leave programs for low-income Americans underfunded.
The California Air Resources Board estimates the state will need $550 million each year through 2030 in equity incentives. Newsom’s 2026-27 budget proposes $200 million in rebates for the purchase of electric vehicles.
Michael Berube, CEO of clean car advocacy group Calstart, said the amount was “certainly welcome, but overall we need more.”Copyright 2026 Capital & Main.
