Gas prices are climbing nationwide, with the US average at $4.119 per gallon while California drivers are paying nearly $5.93 per gallon, according to AAA.

California remains the most expensive state for fuel, and officials are now acknowledging that earlier claims of widespread price gouging by oil companies have not been substantiated after years of investigation, CBS reports.

Instead, attention has shifted to deeper structural pressures — including shrinking refining capacity and state policies championed by Gov. Gavin Newsom aimed at moving California away from fossil fuels.

Two refineries have shut down in recent years, eliminating nearly 20% of California’s gasoline production and tightening an already constrained market.

At the same time, Newsom has advanced aggressive climate initiatives, including plans to phase out oil extraction by 2045 and ban sales of new gas-powered cars by 2035, along with stricter rules on drilling and refining.

While intended to accelerate the transition to cleaner energy, those policies have increased costs and created uncertainty for refiners — discouraging investment and contributing to reduced in-state fuel production.

The result is a growing tension. California continues pushing to curb fossil fuel use even as those efforts risk tightening supply and contributing to higher prices in the near term.

That vulnerability is being amplified by global pressures. Ongoing conflict in the Middle East and supply constraints in Asia are tightening fuel markets worldwide. California, which increasingly relies on imported fuel, is especially exposed to those disruptions.

Industry executives warn that further refinery closures or reduced investment could deepen supply constraints, while policymakers — including Newsom’s administration — are now weighing how to balance long-term climate goals with the need to maintain reliable and affordable fuel.

For drivers, the impact is immediate.

With prices nearing $6 per gallon, California motorists are paying far more than the national average — underscoring how policy decisions, supply constraints, and global forces are converging at the pump.