From 2020 to 2022, inflation wreaked havoc on consumer prices. For some, the pain was most acute at the gas pump, where national prices rose by an astronomical 89.5%, according to the Pew Research Center.
Although prices have abated a bit in 2025, one report, as reported by ABC 7 News, suggests that things could get much worse for the state that already has the highest gas prices in the nation — California. In fact, Michael Mische, a professor at the University of Southern California who wrote the report, believes that gas prices could rise to as much as $8 by 2026 in California, which currently has an average gas price of about $4.88, per AAA.
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Here are the reasons behind Mische’s thesis, along with a look at what Californians can do to save on gas.
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Upcoming Refinery Closures
While it remains to be seen whether gas prices in California will actually reach $8 per gallon, there are some solid economic principles behind Mische’s prediction — specifically, the law of supply and demand.
Several refineries in California, including ones in Benicia and Los Angeles, are slated to close. This will lower the supply of oil and gas, knocking the supply-demand equation out of whack. As any economics student can tell you, when the supply of a good or service that is in demand falls, its price rises. That’s exactly what Mische sees happening in California.
Not everyone agrees. California’s governor, Gavin Newsom, is one of the most vocal critics of Mische, questioning both Mische’s credibility and his predictive model, ABC reported.
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Ways State Government Could Help
State governments don’t control gas prices, but the policies they enact can certainly influence them. To that end, Mische had some direct recommendations for California’s governor and legislators, ABC reported. Those include rolling back the state excise tax, delaying any low-carbon fuel standard implementation and capitating cap-and-trade to a fixed amount.
“Those would all be beneficial to the California consumer,” Mische said.
Ways Individuals Can Save
While individual consumers don’t have much control over the direction of gas prices, there are some steps everyone can take to help minimize the pain.
Use mobile apps to find cheap gas: A number of apps like GasBuddy can show the lowest gas prices available in a given area.
Pump regular gas: Although gas stations are good at making midgrade and premium fuel sound attractive, and even necessary, the truth is that regular unleaded fuel is perfectly fine for the vast majority of cars on the road today. Always using regular gas can save you a significant amount of money.
Take advantage of discounts: Some gas stations offer a discount if you use cash instead of a credit card. If you use a credit card, consider using one that gives you cash back or other bonuses for purchases at gas stations. Most major oil companies also offer their own credit cards that can provide discounts on the amount you pay at their stations.
Plan your trips: Combining your daily trips into one and using a fuel-efficient method to reach all your stops is a good way to lower your gas costs.
Cut down on your driving: Consider using public transportation or ride-sharing to avoid paying for gas.
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Sources
Pew Research Center, “Eggs, gasoline and car insurance: Where inflation has hit Americans hardest.”
ABC 7 News, “California gas prices could top $8 a gallon by 2026, new study says.”
AAA, “Fuel Prices.”
This article originally appeared on GOBankingRates.com: The State Where Gas Could Top $8 a Gallon Soon — and How To Save on Gas
