Bay Area Gas Prices Explode to $7.89/Gallon – Diesel Surging Past $9
- Rex Ballard
- 5 hours ago
- 4 min read
Our Warnings Were Dead On, and the Fix Is Obvious
This is real. A Valero station in the Bay Area is now posting $7.89 per gallon for regular unleaded, with premium at $8.29 and diesel pushing $8.99–$9.00+. Multiple stations across San Francisco, San Jose, and the surrounding region are shattering records as imports dry up and the supply crunch worsens.
While the statewide average sits near $6.14, the Bay Area is taking the hardest hit. Diesel statewide averages $7.42, but local pumps are flirting with $9 as the blockade of the Strait of Hormuz cuts off critical crude shipments.
If you are wondering why this is happening, consider that the California Energy Commission (CEC) officials, including Vice Chair Siva Gunda, testified in early May that current gasoline and diesel inventories — plus projected crude shipments and refinery throughput — provide sufficient supply for roughly 4–6 weeks of normal demand. This rolling forecast horizon extends reliably through mid-June. Inventories remain “within historical range,” and refiners are sourcing from alternative routes (Canada, South America, Alaska, in-state). However, beyond this window, uncertainty grows sharply.
This isn’t random. This is the exact crisis Shasta Unfiltered predicted back in December and January — now hitting faster and harder than anyone expected because Sacramento’s anti-energy policies left California with zero cushion.
We Told You This Was Coming
In our December 8, 2025, article “California’s Gasoline Crisis – $10 Gas – Is It Coming?”, we mapped it out: refinery closures like Phillips 66’s Los Angeles plant and Valero’s Benicia facility would slash 17–20% of capacity. The crushing costs of the Low Carbon Fuel Standard (LCFS), Cap-and-Trade, CARB’s boutique gasoline rules, and the deliberate phase-out of in-state production would drive prices to $5.70–$7.50 on average, with regional spikes hitting $8–$10 and worse during shortages.
Our January 11, 2026, follow-up, “California’s Fuel Crisis,” showed the first wave: hundreds of independent stations closing under SB 445, thousands of jobs lost, and rural fuel deserts forming. And our December 31 piece on Oregon’s crunch warned the entire West Coast was one global shock away from collapse.
Every prediction has now materialized. The only surprise is how quickly the Hormuz crisis accelerated everything.
Hormuz Didn’t Create This Crisis — Sacramento’s Policies Did
Iran’s blockade of the Strait of Hormuz, triggered by the February 2026 U.S.-Israel conflict, has severed 20–30% of California’s imported crude. Tankers stopped arriving. Asian refined products are snarled. The California Energy Commission now confirms we have just 4–6 weeks of visible fuel supply.
But the Hormuz problem is a global event. California’s extreme vulnerability is entirely self-inflicted.
We sit atop billions of barrels in the Monterey Shale, Kern County heavy oil fields, and offshore Santa Ynez resources. Yet decades of liberal policies — offshore drilling moratoriums, SB 1137 setback rules, fracking bans, the 2045 fossil-fuel phase-out, and the nation’s toughest LCFS (now demanding a 30% carbon-intensity cut by 2030) — have deliberately crippled domestic production and driven refiners out.
Those rules didn’t just raise prices. They sent a clear message to every investor and operator: California hates its own oil industry. Plants closed. Storage tanks stayed empty. Import dependence soared past 60%. When Hormuz slammed shut, we had no domestic backup.
The Proven Fix: Tax Incentives to Restart Closed Refineries Immediately
The Phillips 66 Los Angeles and Valero Benicia refineries don’t have to stay dark. The solution is straightforward, proven, and ready to implement today: targeted tax incentives to unshutter them and bring California refining capacity back online fast.
Senate Republicans have already outlined the exact measures Sacramento should adopt right now:
Refinery-Specific Investment Tax Credit (ITC): 15% or higher credit on every dollar spent reactivating plants, upgrading equipment, expanding storage, and building pipelines — modeled after successful Kennedy-era incentives that boosted domestic output. Require refiners to prioritize in-state sales.
Multi-Year Property Tax Abatements: 5–10 years of full or 75% relief on property taxes for reopened facilities.
Production Incentive Credits: Per-barrel credits for every barrel of California-refined gasoline and diesel brought back to market.
Temporary Relief from Punitive Regulations: Direct credits or waivers against LCFS and Cap-and-Trade costs during the critical restart period.
Sales Tax Exemptions: Zero sales tax on all equipment, parts, and infrastructure needed to restart operations.
These incentives would cost a fraction of what $9 diesel and $8+ gas are already draining from families, truckers, farmers, and businesses. Pair them with fast-tracked permitting, CEQA exemptions for restarts, and federal support from the Trump administration’s pro-energy agenda — and the plants could be producing again within months.
Sacramento has floated limited credits for “green” conversions at some facilities. That’s a half-measure. We need full incentives to keep conventional refining alive and delivering affordable fuel today.
This was all avoidable. A rational policy would have expanded in-state drilling, eased the regulatory burden, and built real fuel reserves instead of gambling on foreign tankers. Now the fix is staring us in the face.
Shasta County and the North State are already feeling the pain: higher grocery prices, skyrocketing delivery costs, and rural routes running dry. This isn’t “climate leadership.” It’s economic sabotage.
Demand change now. Repeal the LCFS mandates. Roll back the EV-only fantasy. Open responsible access to California’s own oil reserves. Pass these tax incentives immediately to restart the closed refineries and restore energy security.
We warned you in December. We warned you in January. The Bay Area’s $7.89 gas and $9 diesel prove it: runaway liberal policies made this inevitable. The Hormuz blockade just pulled the trigger faster.
It’s time Sacramento stopped punishing California drivers and started protecting them.
Share this far and wide. Call your legislators. Tag your friends at the pump — they need to see this before the next shock leaves us completely stranded.
Shasta Unfiltered — Honest News for the North State.
