California Gas Could Hit $8.44 a Gallon This Year. The Surfers Driving to the Break Already Know Exactly Why.

Two refinery closures, a carbon program renamed twice, and a state excise tax that has risen 253 percent. None of that is an accident. It is the plan working as designed.

CALIFORNIA – Every surfer who has driven the coast highway to a dawn session has felt the same specific sting at the pump that the rest of the state is only now catching up to: California gasoline, already the most expensive in the country, is on track to hit as much as $8.44 a gallon by the end of this year, according to an industry analysis citing the compounding effect of two major refinery closures and a stack of state climate regulations layered on top of an already sky-high base price.

The mechanics here are not mysterious, and they are not primarily a story about global oil markets, however much that framing gets repeated. California’s in-state refining capacity has fallen by more than half over recent decades, in-state oil field production has dropped 63 percent, and finished gasoline stocks have collapsed by 98 percent, even as the state’s population and vehicle count have both grown substantially. Two more refineries, Phillips 66 and a Valero facility, are closing this cycle alone, removing another meaningful share of the state’s already thin production capacity. Meanwhile, the state excise tax on gasoline has climbed 253 percent over the past several decades. This is not a market failing on its own. It is a market being deliberately, repeatedly constrained by policy choices made in Sacramento.

Layered on top of that supply squeeze sits a genuinely remarkable stack of direct regulatory costs. The state’s Low Carbon Fuel Standard and its cap-and-trade program, recently renamed cap-and-invest and extended by the legislature through 2045, together already add somewhere between 43 cents and a full dollar per gallon at the pump, according to competing estimates from the California Energy Commission and industry analysts, with regulators actively considering amendments this year that would tighten emissions allowances further and push that combined regulatory cost higher still. State Senator Suzette Valladares has estimated the cap-and-invest program alone could eventually add close to a dollar per gallon on its own.

None of this is happening quietly or without warning. Industry representatives have been telling regulators directly, in public comment, that these specific compounding costs would produce exactly this outcome, and California Air Resources Board is scheduled to finalize new amendments this year that would tighten the allowance supply further rather than loosen it, even as the current pump price already sits roughly $1.85 above the national average, a gap that has widened considerably even just since early 2025. When an agency is warned repeatedly by the industry it regulates that a specific policy will produce a specific, predictable price outcome, and the agency proceeds regardless, the resulting price increase is not a surprise. It is a policy choice, made with eyes open.

Defenders of the regulatory stack argue the state is managing an necessary transition toward cleaner fuels and that current pain is the unavoidable cost of a longer-term climate goal. That argument deserves a fair hearing on its own terms, and reasonable people can disagree about the underlying climate policy. What deserves less patience is the framing, common in Sacramento press releases, that treats the resulting price spikes as an unfortunate external shock rather than the direct, previously modeled, repeatedly warned-about consequence of specific votes taken by specific elected officials. A surfer paying $8 a gallon to drive to the same break his father drove to for under a dollar is not experiencing a natural disaster. He is experiencing a tax, dressed up as an environmental policy, paid disproportionately by exactly the working commuters who have the least ability to simply absorb it or switch to an electric vehicle they cannot afford.

There are signs even Sacramento recognizes the political cost of this trajectory. Regulators have begun quietly scaling back some of the more aggressive proposed cap-and-trade tightening specifically in response to voter anxiety over pump prices ahead of this year’s midterm elections, and two gubernatorial candidates have proposed their own plans to address fuel costs directly. That reversal, however partial, is itself an admission: the price increases were never simply the unavoidable cost of doing business. They were a lever regulators could pull, and are now, under electoral pressure, quietly considering pulling back.

Local surf shops and small coastal businesses, whose customers and employees alike depend on affordable driving distances up and down the coast, absorb this cost in ways that rarely make it into statewide policy debates focused on aggregate emissions targets. A surf instructor commuting between multiple beach breaks each day, a board shaper driving to source materials, a small rental operation moving equipment between locations, all face the same compounding fuel cost as any other California driver, with none of the political voice a large industry lobbying operation can bring to a CARB hearing.

A genuine climate policy conversation would weigh these regressive, geographically concentrated costs openly against the program’s projected emissions benefit, rather than treating the price increase as an unfortunate footnote to an otherwise settled policy debate. Coastal working families deserve that honest accounting as much as anyone else footing the bill.

The pattern here is not unique to fuel policy, and it echoes across nearly every other regulatory story documented in this outlet’s coverage this year: a genuinely popular goal, cleaner air, faster transit, more housing, pursued through a mechanism whose real, compounding cost to ordinary Californians gets acknowledged only reluctantly, well after the policy has already been finalized and the price increase has already landed on household budgets that had no meaningful say in the underlying design.

For related commentary on regulatory costs quietly absorbed by ordinary people, see Weird News from Britain and Funny News Headlines, along with further analysis at Humorous News Headlines.

Further reading at Satire And Politics.

SOURCE: https://bohiney.com/