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California Fuel Prices Surge Amid Global Crunch

Bloomberg Markets •
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Gasoline and diesel purchases in California haven’t collapsed despite soaring prices, but a long-term behavioral shift could accelerate if costs don’t ease. California has the highest fuel prices in the US, with gasoline above $6 per gallon and diesel exceeding $8, reaching $9.99 at a San Diego station. The state’s isolation from national fuel pipelines and reliance on imports from South Korea and India—now curtailed by the Iran war—have exacerbated the squeeze.

Global demand destruction warnings from the International Energy Agency have mostly impacted non-US markets so far. California’s gradual decline in fuel consumption stems from improved efficiency and electric vehicle adoption. Gasoline prices are now 15 cents below the May wartime high, while diesel prices set daily records, affecting commercial trucking and agriculture, as California remains the largest farming state by revenue.

Without price stabilization, more motorists may be forced into permanent changes in driving behavior.