A new argument is gaining traction in Sacramento: California’s shift toward gasoline imports is actually good news for consumers, because having more suppliers increases competition – and more competition means lower prices.
“We’re shifting to a model where there’s a refining core that’s most of the supply. But there’s now supplemental supply coming in that is 20 or 25 percent on average. And what that means is less controlled by those few companies here and more competition. And so, in the years 2024 and 2025 when we’ve had more import competition, we’ve had lower and more stable prices.”
There are two main issues with this narrative.
First, the sudden embrace of ‘competition’ in the gasoline supply chain is a stunning reversal for Sacramento, given how state policies have systematically shut down in-state oil production and refining in recent years. California, which once had over 40 refineries supplied by mostly in-state oil, now has just seven refineries that are highly dependent on expensive foreign crude.
Second, the ‘import competition’ narrative is not just inconsistent – it’s also misleading.
The reason why gets to the heart of how commodity markets work. The wholesale price of gasoline is set by the most expensive barrel available – the “marginal barrel” – which in California’s case is an imported barrel.
“[I]n-state refineries have wider margins because the marginal barrel is still an import barrel. While their costs of acquisition of crude oil might not change day to day, if the import barrel which is being sold at the rack is priced marginally at a very high cost, that delta will be captured by everybody who’s selling in California.”
In other words, Milder leaves out a crucial detail: marine imports set the price of gas in California. More foreign suppliers may have resulted in lower gas prices, but that’s because they are undercutting other foreign suppliers – not in-state refineries as Milder likes to imply.
It’s curious how two CEC officials can give starkly different accounts of the same fuel market at the same hearing – especially since the high cost of imported gasoline is not a new concern.
In their 2024 Transportation Fuels Assessment, the CEC repeatedly states that gasoline imports are costly, warning:
“The cost of policies for importing finished fuel tends to be high, as there is a cost associated with shipping the fuel.”
Indeed, Gunda himself has been clear on this point for many months. At a December 2025 CEC committee meeting which Milder also attended, Gunda stated that imports “have not reduced the cost [of gasoline] in the wholesale market,” directly disproving Milder’s preferred narrative.
Bottom line: the import competition argument is a red herring. California-made gasoline is cheaper to produce and deliver than fuel shipped across the Pacific.
