How high will gas prices in California get this year?
Short Answer
Both the model and the market overwhelmingly agree that gas prices in California will reach above $4.60 this year, with no compelling evidence of mispricing.
1. Executive Verdict
- Planned refinery maintenance in Q2 2026 will reduce supply.
- West Coast gasoline inventories are below five-year seasonal averages.
- PBF Energy Martinez refinery has significant planned turnaround in Q2.
- California fuel programs and tax adjustments are set to raise pump costs.
- Low Carbon Fuel Standard (LCFS) imposes more stringent carbon intensity.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above $7.40 | 25.0% | 28.4% | Research does not highlight strong supporting evidence. |
| Above $6.00 | 99.0% | 98.8% | Research does not highlight strong supporting evidence. |
| Above $7.20 | 32.0% | 31.1% | Research does not highlight strong supporting evidence. |
| Above $7.60 | 29.0% | 28.4% | Research does not highlight strong supporting evidence. |
| Above $6.80 | 63.0% | 60.1% | Research does not highlight strong supporting evidence. |
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market has demonstrated a powerful and rapid upward trend. The price originated at a 37.0% probability and surged to its current level of 99.0%. This ascent was characterized by two particularly sharp movements: a 37.0 percentage point spike on April 17, 2026, which took the price from 37.0% to 74.0%, and a subsequent 15.0 percentage point jump to 84.0% on April 21. The specific drivers for these significant re-pricings are not identifiable from the provided context. However, the velocity of these moves suggests the market was reacting to new, impactful information that dramatically shifted expectations.
The market's initial price of 37.0% can be viewed as an early support level, which was decisively broken to the upside. Following the spikes, the prices of 74.0% and 84.0% acted as temporary plateaus before the final ascent. The current price of 99.0% now functions as a strong resistance ceiling. The total trading volume of 2,259 contracts over the market's history indicates a healthy level of participation. The sharp price increases were likely accompanied by significant volume, reflecting strong conviction from traders driving the price higher.
Overall, the price action paints a clear picture of a market that has moved from a state of uncertainty to one of near-absolute certainty. The swift, upward trajectory and the current price hovering just below 100% indicate an overwhelming consensus among market participants. The sentiment is decisively bullish, suggesting that traders believe the event's probability is extremely high.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Above $6.20
📈 April 29, 2026: 8.0pp spike
Price increased from 84.0% to 92.0%
What happened: No supporting research available for this anomaly.
Outcome: Above $6.40
📈 April 27, 2026: 17.0pp spike
Price increased from 64.0% to 81.0%
What happened: No supporting research available for this anomaly.
Outcome: Above $6.80
📈 April 23, 2026: 16.0pp spike
Price increased from 38.0% to 54.0%
What happened: No supporting research available for this anomaly.
📉 April 22, 2026: 11.0pp drop
Price decreased from 49.0% to 38.0%
What happened: No supporting research available for this anomaly.
Outcome: Above $6.00
📈 April 21, 2026: 15.0pp spike
Price increased from 69.0% to 84.0%
What happened: No supporting research available for this anomaly.
4. Market Data
Contract Snapshot
This Kalshi prediction market resolves to "Yes" if the average regular gas price for California is strictly greater than $7.00 by December 31, 2026, as verified by AAA; otherwise, it resolves to "No." The market opened on March 17, 2026, at 11:00 AM EDT.
The market closes after the outcome occurs, either by December 31, 2026, at 9:55 AM EST if the condition is not met, or on the following 10:15 AM, 11 AM, or 3 PM ET if the condition is met. Payout is projected for one hour after closing.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above $6.00 | $1.00 | $0.06 | 99% |
| Above $6.20 | $0.94 | $0.16 | 92% |
| Above $6.40 | $0.81 | $0.29 | 70% |
| Above $6.60 | $0.73 | $0.36 | 63% |
| Above $6.80 | $0.66 | $0.44 | 63% |
| Above $7.00 | $0.48 | $0.62 | 45% |
| Above $7.20 | $0.39 | $0.68 | 32% |
| Above $7.60 | $0.29 | $0.81 | 29% |
| Above $7.40 | $0.32 | $0.76 | 25% |
Market Discussion
Traders are actively discussing the potential for California gas prices to reach significantly high levels this year, with market probabilities showing a 63% chance of exceeding $6.80 and a 45% chance of surpassing $7.00. Key arguments for higher prices cite geopolitical factors and the expectation that federal intervention will not prevent prices from potentially hitting $7.50 or even $8.50. While no explicit "No" arguments are present, a strong sentiment exists among some participants that current market options may underestimate the peak price, with calls for even higher strike prices.
5. What California Refinery Maintenance is Planned for Q2 2026?
| PBF Martinez Refinery Turnaround | Q2 2026 [^] |
|---|---|
| PBF Martinez 2026 Throughput Guidance | 135,000-145,000 bpd [^] |
| CAISO Report on Generator Outages | April 2026 report available [^] |
California refineries schedule maintenance, impacting Q2 2026 operational capacity. PBF Energy's Martinez refinery has a significant planned turnaround slated for the second quarter of 2026. This maintenance event is incorporated into the company's annual guidance, projecting the Martinez refinery's 2026 crude oil throughput to be between 135,000 and 145,000 barrels per day (bpd), a reduction from earlier periods due to this scheduled work [^]. While U.S. refineries anticipate a busy maintenance schedule in 2026 overall [^], specific Q2 2026 planned maintenance details for Chevron El Segundo and Marathon Carson refineries were not explicitly available in the provided sources. Chevron's El Segundo refinery, which experienced a fire in an Isomax unit, had repairs and a restart planned by March [^], suggesting a return to normal operations by Q2 2026 unless new incidents occur. The state's overall operational capacity is also strained by recent refinery closures, such as Valero's Benicia facility [^].
Unplanned events for Q2 2026 are not yet available. The California Independent System Operator (CAISO) provides publicly accessible reports on curtailed and non-operational generators, with an "Apr 2026" report available that would contain relevant information for that month within CAISO's purview [^]. However, specific details concerning refinery events are not included in the provided information. As Q2 2026 is in the future, real-time data regarding actual unplanned outages or flaring events would be reported as they happen. Energy news services continuously monitor refinery operations and would typically report any significant unplanned incidents closer to or during the actual quarter.
6. What Are Current West Coast Gasoline Inventory and Import Data?
| PADD 5 Gasoline Inventories | 27.5 million barrels (most recent weekly report) [^] |
|---|---|
| Inventories vs. 5-Year Average | 2.5% below average [^] |
| PADD 5 Gasoline Imports | 88 thousand barrels per day (most recent monthly data) [^] |
West Coast gasoline inventories are slightly below the five-year seasonal average. As of the most recent weekly reporting period, finished motor gasoline inventories in the West Coast (PADD 5) stood at approximately 27.5 million barrels [^]. This level is about 2.5% below the five-year seasonal average for this time of year, leading into the summer driving season [^]. These inventory figures are a key indicator of the regional supply status and preparedness for potential increases in demand [^].
Foreign imports contribute to West Coast supply, largely meeting CARB standards. In the most recently available monthly data, the West Coast (PADD 5) imported approximately 88 thousand barrels per day of finished motor gasoline from foreign refineries [^]. While the U.S. Energy Information Administration (EIA) does not specifically categorize imports as "CARB-compliant" in its general finished motor gasoline statistics, a significant portion of finished gasoline imported into California and the broader PADD 5 region from foreign refineries would inherently meet California Air Resources Board (CARB) specifications due to the region's stringent environmental regulations [^].
7. How Have Pacific Coast Gasoline Crack Spreads and Margins Changed?
| CARB RBOB Crack Spread Q2 2022 Average | $70 per barrel [^] |
|---|---|
| West Coast Gross Refining Margin June 2022 | $60 per barrel [^] |
| California Gas Prices Late 2025/Early 2026 | Reached record highs [^] |
The Pacific Coast gasoline crack spread reached unprecedented peaks in 2022. This surge was primarily attributed to a combination of reduced refinery capacity, robust demand, and operational outages [^]. Specifically, the California Air Resources Board (CARB) reformulated gasoline blendstock for oxygenate blending (RBOB) crack spread averaged an extraordinary $70 per barrel in the second quarter of 2022 [^]. Furthermore, gross refining margins for gasoline on the West Coast climbed to $60 per barrel in June 2022, a figure more than triple the average recorded over the preceding five years and significantly surpassing the prior record of $30 per barrel set in September 2015 [^]. During this period, the premium for West Coast crack spreads also expanded to record levels when compared to other regions across the United States [^].
West Coast refining margins saw declines in 2023, yet future volatility persists. Despite ongoing reductions in West Coast refining capacity, refinery margins for gasoline in summer 2023 registered lower than those in 2022, 2021, and fell below the 2018–22 average [^]. However, California gas prices still reached record highs in late 2025 and early 2026 [^], though these elevated prices subsequently declined in April 2026 [^]. The overall market environment, characterized by shrinking refinery capacity and surging demand, indicates a continued potential for volatile and high crack spreads in the future [^].
8. How Will California's Fuel Programs Impact Gas Prices By Mid-2026?
| LCFS Reduction Target | 25% carbon intensity reduction by 2026 (compared to 2010 levels) [^] |
|---|---|
| State Gas Tax Adjustment | Annual inflation adjustments effective July 1st [^] |
| Cap-and-Invest Program Impact | Updates could increase consumer costs by mid-2026 [^] |
California's Low Carbon Fuel Standard (LCFS) and gas tax adjustments will increase pump costs. The LCFS is set to impose more stringent carbon intensity (CI) reduction targets, requiring a 25% reduction by 2026 compared to 2010 levels [^]. These escalating requirements typically lead to higher compliance costs for fuel providers, which are then passed on to consumers at the pump [^]. Additionally, the state's gas tax undergoes annual inflation adjustments, with increases usually taking effect every July 1st [^]. While the specific amount for July 1, 2026, will be determined closer to the date, this scheduled statutory adjustment will also contribute to the per-gallon cost [^].
Updates to Cap-and-Invest are expected to influence fuel prices. California's Cap-and-Invest program is undergoing updates anticipated to impact fuel costs by mid-2026. The California Air Resources Board (CARB) has proposed changes to this program, including adjustments to the cap trajectory and allowance allocations [^]. Fuel refiners and importers are required to purchase allowances under this program, with these costs generally passed to consumers, currently adding an estimated 10-15 cents per gallon to gas prices [^]. Any changes that tighten the emissions cap or increase allowance costs, as suggested by proposed cap trajectory adjustments, would likely further increase the embedded cost at the pump [^]. The rulemaking process for these 2026 Cap-and-Invest changes is ongoing [^].
9. Are California VMT Forecasts Available for Q1 and Q2 2026?
| California VMT Forecast Q1 2026 | Not available from provided sources [^] |
|---|---|
| California VMT Forecast Q2 2026 | Not available from provided sources [^] |
| Latest VMT Data Availability | Primarily historical, up to 2023 or 2025 [^] |
Specific 2026 California VMT forecasts for Q1 and Q2 are unavailable. Year-over-year change forecasts for California Vehicle Miles Traveled (VMT) during Q1 and Q2 2026 could not be found within the provided web research. Despite examining various sources, including Caltrans and proprietary mobility datasets from INRIX and Geotab, specific quantitative year-over-year VMT forecasts for these periods in 2026 were not present [^]. The available information primarily consists of historical VMT data and analyses, typically extending up to 2023 or 2025.
Reviewed sources primarily provide historical VMT data and trends. Caltrans regularly publishes historical VMT data through its reports and online resources, offering insights into past trends [^]. Similarly, private data providers like INRIX offer analyses such as the Global Traffic Scorecard, which provides current and historical traffic patterns, with the most recent insights generally covering up to 2025 [^]. While Geotab announced a '2026 State of Commercial Transportation Report,' the press release itself does not contain specific forecasted California VMT year-over-year changes for Q1 and Q2 2026 [^]. Consequently, precise year-over-year VMT change percentages for California in Q1 and Q2 2026 for gasoline demand forecasting are not available from the given materials.
10. What Could Change the Odds
Key Catalysts
Catalyst analysis unavailable.
Key Dates & Catalysts
- Strike Date: December 31, 2026
- Expiration: January 07, 2027
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: Catalyst analysis unavailable.
13. Historical Resolutions
Historical Resolutions: 14 markets in this series
Outcomes: 14 resolved YES, 0 resolved NO
Recent resolutions:
- KXAAAGASMAXCA-26DEC31-5.90: YES (Apr 06, 2026)
- KXAAAGASMAXCA-26DEC31-5.80: YES (Mar 24, 2026)
- KXAAAGASMAXCA-26DEC31-5.70: YES (Mar 22, 2026)
- KXAAAGASMAXCA-26DEC31-5.60: YES (Mar 19, 2026)
- KXAAAGASMAXCA-26DEC31-5.50: YES (Mar 16, 2026)
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