New report warns California gas prices may soar past $8 a gallon by 2026

SAN DIEGO (FOX 5/KUSI) — A new report warns gas prices locally and across California may rise up to 75% by 2026 as refinery capacity shrinks.

The average price for a gallon of regular gas in San Diego County rose Saturday to $4.79, nearly two dollars more than the state average of $3.13, but in the months to come all drivers in California could all be paying much more to fill up. 

With warmer months ahead, we can expect something besides just temperatures to go up.  

“Historically, we always pay a little bit more for gas during the summer because of that high demand and because of that summer blend gasoline," said Annlleyn Venegas, Senior Public Specialist with the American Automobile Association.

Venegas said price shifts are also often influenced anytime there are fears about supply. 

The report by Michael Mische at USC’s Marshall School of Business warns fuel prices could top $8 by the end of next year. San Diego-area drivers are dreading what might be coming at the pump.  

“I'm probably going to drive a lot less if I'm having to pay that much for gas. It’s concerning. We already pay more than every other state," said resident Austin McAdams.

“It would be less travel. I would have to make different plans and things like that. So, it would definitely be more of a hardship," said resident Leslie Brown.

The report cites the scheduled closures of the Phillips 66 Refinery in Los Angeles this October and Valero's Benicia Refinery next April.

It states when that happens, it could mean a potential 21% reduction in the state's refining capacity over three years, and some lawmakers are waving the red flag. 

“We are in a current financial crisis and we’re on the precipice of a financial disaster if the governor doesn’t get his arms wrapped around this problem and get it fixed," said State Senate Minority Leader Brian Jones, R-San Diego.

Jones sent a letter to Governor Gavin Newsom urging him to “find immediate solutions and prevent further closures.”

Governor Newsom has disputed the study’s findings. 

Taking to X, his press office shared a letter he sent to the California Energy Commission directing it to “redouble efforts to work with refiners to ensure a safe, affordable and reliable supply of gasoline.”

As they keep tabs, some experts are waiting for clarity with the rest of us. “It's really hard to know for sure what could happen in the near future," said Venegas.

The study also suggested ways lawmakers can lower gas prices, such as revoking a plan to ban the sale of new gas-powered cars by 2035, and easing restrictions on in-state petroleum production.