Gas prices in the Sacramento Metropolitan Area, including Sacramento, Yolo, Placer and El Dorado counties, are about eight cents cheaper than the state’s average, which sits at about $4.65 per gallon, according to AAA’s website. Photo by Seth Henderson

SACRAMENTO REGION, CA (MPG) – According to the Division of Petroleum Market Oversight (DPMO), California’s gasoline retail prices have risen approximately 16 cents per gallon since Aug. 15, with refinery closures prompting more price-hikes.

The Division of Petroleum Market Oversight is an independent agency within the California Energy Commission established in 2023 by Senate Bill X1-2, designated as the “watchdog agency overseeing the oil and gasoline industry,” according to the agency’s website.

Division of Petroleum Market Oversight monitors California’s gasoline spot market, the market in which fuel is bought and sold in bulk.

Gas prices in the Sacramento Metropolitan Area, including Sacramento, Yolo, Placer and El Dorado counties, are about eight cents cheaper than the state’s average, which sits at about $4.65 per gallon, according to AAA’s website last week. The national average, as of Sept. 19, is $3.19 per gallon, nearly a $1.50 per gallon difference.

Due to incidents and planned closures within the next year, California’s oil refinery production is slated to significantly decrease, according to a University of California, Davis Economists report, causing the state’s prices to rise $2.50 above the national average.

The economists wrote that California could see a $1.21 increase in gasoline prices after the closure of two refineries producing nearly 20% of the state's gasoline.

A Martinez Refining Company fire in February reportedly led to an operator error that caused hydrocarbon material to quickly catch fire, according to JEM Advisors, a third-party company hired to determine the fire’s source. The Phillips 66 refinery in Wilmington and the Valero refinery in Benicia that make up approximately 17% of the state’s refining capacity are scheduled to close before next summer.

According to the Division of Petroleum Market Oversight, gas prices rose after the Martinez Refining Company fire but prices stabilized after imports exceeded 170,000 barrels per day.

UC Davis economists estimate gasoline’s price elasticity, the percentage increase in price equilibrium in response to a given reduced percentage of gasoline supply, saying “a 16.9% decrease in capacity (the share of the two closing refineries) will result in an approximately 28% increase in the gasoline price after the market reaches its new equilibrium.”

Gasoline demand increased, nationally, whereas the national production supply of domestically produced gasoline decreased, according to the Energy Information Administration.

A Division of Petroleum Market Oversight letter addressed to Governor Gavin Newsom, Senate President pro Tempore Mike McGuire and Speaker of the Assembly Robert Rivas on Sept. 16 said, “… It appears that strong gasoline and blending component imports have played a critical role in keeping wholesale and retail prices stable through the spring and summer. According to CEC and U.S. Energy Information Administration (EIA) data, California received 18 million barrels of gasoline and blending component imports (averaging 150,000 barrels per day) between February and May 2025, peaking at 5.7 million barrels (184,000 barrels per day) in March 2025.”

The Division of Petroleum Market Oversight encourages consumers to shop around for less expensive gasoline because all gasoline sold in California is required to adhere to strict Air Resources Board standards, irrespective of whether the gasoline is branded or unbranded. California’s gasoline has strict regulations, requiring cleaning additives or detergents to protect engine performance and reduce emissions.

“DPMO is not aware of public evidence confirming that branded gasoline outperforms unbranded or generic gasoline in California,” the division’s letter said.