California's Division of Petroleum Market Oversight (DPMO), an independent agency within the California Energy Commission, has issued subpoenas to gas stations across the state that are charging unusually high prices and have not cooperated with agency requests. This action follows the DPMO's statement in March that it was monitoring for potential price gouging amidst rising global fuel costs due to the Iran conflict.
Tai Milder, Director of the DPMO, indicated that the agency is specifically looking into whether major gas companies, including brands like Chevron, Shell, and Valero, are exploiting the recent price spike to boost their profits. He noted that these branded stations typically charge an average of $0.31 more per gallon than unbranded stations in California, a stark contrast to the $0.06 national average difference. Milder also mentioned that Assembly Bill 325, effective this year, prohibits the use of shared software algorithms to coordinate prices, and market participants have been notified.
State tax official Gentian Droboniku highlighted that retail markups significantly contribute to price variations at the pump, with wholesale and retail prices differing by up to 70%. Data collected between January and September 2025 showed a price differential of $1.76 per gallon between the 100 most expensive and 100 least expensive gas stations in California. Droboniku, from the California Department of Tax and Fee Administration (CDTFA), expressed interest in investigating whether algorithms and other technologies are influencing pump prices, citing a German study where algorithmic pricing increased margins by as much as 15%, potentially indicating tacit collusion.
A separate investigation is also underway for specific brands such as Circle K, Marathon/ARCO/ampm, QuikStop, Speedway/Speedway Express, TravelCenters of America, and Wal-Mart/Sam's Club in various California areas. This investigation focuses on whether these stations are using automated pricing models to collectively raise prices, potentially violating California law and leading to consumers being overcharged. Consumers who purchased gasoline from these brands in designated areas in 2026 may be eligible for monetary compensation.
