The average price of regular gasoline in California has reached $5.76 a gallon — nearly two dollars above the national average of $3.97. Some Los Angeles stations are charging $9. Prices across the Bay Area start at $5.80. On March 3, the statewide average stood at $4.67. In three weeks, drivers have absorbed more than a dollar per gallon.
The cause is the war with Iran and the closure of the Strait of Hormuz, a chokepoint for roughly 20% of the world’s oil supply. California is absorbing the shock harder than any other state: it levies the country’s highest fuel tax — 61 cents per gallon in excise taxes, roughly 88 cents all-in — mandates a unique reformulated gasoline blend produced nowhere else in the country, and is losing refining capacity. Phillips 66 shut its Los Angeles refinery in 2025. Valero is closing its Benicia plant by spring 2026. Together, that’s 20% of California’s in-state refining capacity gone.
Mahan: Suspend the Tax
San Jose Mayor Matt Mahan — a Democrat running for governor — is calling for a temporary suspension of California’s gas tax for the duration of the war, or for as long as prices remain above $5 a gallon. The move would cut prices by 61 cents. Mahan made the pitch at a debate in Monterey and filmed a video at a gas station. His argument: families are choosing between fuel, rent, and food.
Critics push back. Gas tax revenue funds road repairs. UC Berkeley professor Severin Borenstein warns oil companies could pocket the savings rather than pass them to drivers. A Republican bill making the same argument — SB 1035, introduced by Tony Strickland — already died in committee.
Villaraigosa: Suspend the Regulations
Former Los Angeles Mayor Antonio Villaraigosa, also a Democrat, is going further. He wants an immediate moratorium on California Air Resources Board regulations that, he says, add between 50 cents and $1.30 to every gallon. Villaraigosa blames Sacramento for driving refineries out of the state and leaving California dependent on Middle Eastern imports. His plan also includes rebates for low-income families if prices stay above $5.50 for more than a month.
Newsom: No
Governor Gavin Newsom opposes suspending the tax. His position: oil companies will capture the savings, and roads will lose their funding. The Democratic legislative majority agrees. Sen. Ben Allen called the gas tax a critical infrastructure source that voters themselves chose to increase.
Republican candidates are offering more aggressive alternatives. Steve Hilton is promising $3-a-gallon gas; Chad Bianco wants to eliminate the gas tax entirely. Both want to expand in-state oil production. Democratic front-runners Katie Porter, Tom Steyer, and Eric Swalwell have stayed quiet or dismissed their rivals’ proposals as unserious.
Current polls put Mahan and Villaraigosa at 3% each. But a quarter of voters remain undecided — and every trip to the pump is an argument for whoever is talking about gas prices loudest.