California warns six-week gas risk

California officials are warning that the state’s gasoline market is entering a narrower operating window. At a May 5 Assembly oversight hearing, California Energy Commission Vice Chair Siva Gunda said the state can confidently forecast gasoline and crude shipments only through about mid-June, with supply stable through that period. (kqed.org) After that, he told lawmakers, California may still be able to attract cargoes, but only by paying more than competing buyers in Asia and other markets. (gasprices.aaa.com) AAA listed California’s average regular gasoline price at $6.14 a gallon on May 16, the highest state average in the country. (efiling.energy.ca.gov) ### Why are officials focused on a six-week window? Siva Gunda told the Assembly Utilities and Energy Committee on May 5 that California can see incoming gasoline and crude shipments through roughly mid-June and that “liquidity, in the short-term, is okay.” He said the risk rises after that point because the state will need more marine cargoes to replace disrupted and declining supply. KQED reported on May 15 that state officials described the six-week period as the point before California runs out of a stable gasoline supply. Gunda said the state is negotiating long-term supply arrangements with Asian refiners that could provide another three to six months of certainty if those deals are secured. (kqed.org) ### What changed in California’s fuel system? The May 5 hearing was titled “Fueling Uncertainty: Assessing California’s Petroleum Supply Resilience and Strategic Planning,” and it brought together the Energy Commission, the Division of Petroleum Market Oversight, refinery labor, oil industry representatives and academic economists. (kqed.org) The lineup itself reflected the state’s concern about supply resilience, not only retail prices. The California Energy Commission’s 2026 joint gasoline-price report said the agency and the California Department of Tax and Fee Administration are using expanded data collection under SB X1-2 to track refinery operations, wholesale markets, retail prices, margins and price spikes. (kqed.org) A separate staff report in the same proceeding said potential refinery closures in 2025 and 2026, together with earlier refinery conversions, would amount to a 30% reduction in in-state gasoline production capacity since 2019. ### Why could prices rise even if California does not run out of fuel? (autl.assembly.ca.gov) Siva Gunda said at the hearing that California can outbid other markets for gasoline and crude cargoes, but that “it will come at a price.” He said higher bids would pull molecules toward California from Asia and elsewhere, shifting the cost to consumers at the pump. AAA said California’s average regular gasoline price was $6.14 a gallon on May 16, versus a U.S. average of $4.52. KQED reported that California drivers were already paying about $6.15 a gallon on May 15 as the state dealt with war-related crude price pressure and tighter supply options. (energy.ca.gov) ### What does this mean for warehouse and delivery operators? Southern California warehouse users and third-party logistics operators buy transportation in several ways, and fuel touches each one. Employee commuting costs rise when retail gasoline climbs, while diesel and gasoline costs feed directly into drayage, linehaul and last-mile delivery pricing. (kqed.org) California officials have not laid out a sector-specific logistics forecast, but Gunda told lawmakers that replacement supply will be more expensive, and that cost would reach consumers. Neale Mahoney of Stanford and Severin Borenstein of UC Berkeley told the May 5 hearing that imports can add competition and that California’s resilience increasingly depends on port, pipeline and storage capacity to handle those imports. (gasprices.aaa.com) Their testimony points to a freight market in which location, routing distance and access to import-linked infrastructure matter more when fuel is expensive. ### What are officials doing next? The California Energy Commission’s SB X1-2 docket shows a May 1 release of a draft Transportation Fuels Transition Plan, a draft Senate Bill 237 assessment and the 2025 joint gasoline-price report, followed by a May 8 notice for a draft SB 237 workshop. (kqed.org) Those filings indicate that state agencies are still building the policy framework around supply planning and fuel-market oversight as the mid-June supply window approaches. The next public markers are in that docket: the draft Transportation Fuels Transition Plan, the draft SB 237 assessment and any workshop materials or revisions posted by the California Energy Commission. (kqed.org) Officials have also said they are seeking longer-term supply deals with Asian refiners to extend visibility beyond mid-June. (efiling.energy.ca.gov)