California gas prices soar due to policy, not price gouging

As of April 14, 2025, California continues to experience the highest gas prices in the U.S., averaging $4.67 per gallon. This rate is significantly above the national average, with some counties reporting prices over $5.80. A study by Professor Michael Mische at the University of Southern California identifies several factors contributing to these elevated costs. California's reliance on imported crude oil, which composes more than 60% of its supply, adds transportation costs and introduces vulnerability to global market fluctuations. Recent refinery closures, including those by Phillips 66, exacerbate the issue by reducing total refining capacity in the state. The state lacks significant inbound crude oil pipelines, which limits its options for securing resources efficiently. Unlike Texas or Louisiana, California's dependency on importation means price increases will affect not only its residents but also those in neighboring regions. As energy companies continue to exit California, the state faces further limitations in refining capabilities, likely resulting in constrained fuel supply and rising prices. Mische's study also reveals that corporate profiteering is not a primary factor driving up gasoline prices, signifying that the issue is rooted more in state policy, regulation, and infrastructure challenges than in market manipulation. While the policies in place align with California's environmental and political objectives, the economic repercussions for drivers and the broader energy sector are substantial. In conclusion, California's high gasoline prices are not mere fluctuations in market demand, but rather systemic, deliberate consequences of numerous interconnected factors that policymakers will need to address responsibly to find relief for consumers in the future.