California’s fuel crisis has reached a shocking new milestone as diesel blows past $8 a gallon in San Francisco — the highest price ever recorded in any U.S. city.
The average price of the fuel – used to power everything from trucks to industrial machinery – sat at a statewide $7.67 per gallon Sunday, according to the American Automobile Association, also the most Californians have ever paid.
Now experts are warning the huge surge is going to hit consumers in the pocket by summer, with everyday goods set to skyrocket.
Just weeks ago, on March 2, diesel in California was $3.90 a gallon, meaning prices have doubled in a month.
The spike comes as the rest of the U.S. sees diesel prices begin to stabilize after soaring in the wake of military action against Iran and the closure of the Straits of Hormuz.
The continued rise comes as U.S. Energy Information Administration data found nationwide diesel prices rose by just 2.6 cents in the last week of March, with three regions actually seeing prices fall.
But California is bucking the trend, with prices jumping a whopping 34.9 cents, highlighting how exposed the state is to supply shocks.
Unlike much of the country, California has no direct fuel pipelines from outside the state, meaning most supplies must be imported by ship, rail or road, according to Industry Dive.
The state also has a limited number of refineries, while strict environmental regulations aimed at shifting consumers away from fossil fuels have made the market more vulnerable to disruption.
Industries across the supply chain are already feeling the squeeze and are warning consumers will soon feel it at the cash register – especially for perishable goods that rely on refrigerated transport.
The California Trucking Association said the soaring diesel prices “will be passed down to consumers in the price of everyday goods like construction materials, groceries, health care supplies and retail products.”
The Independent Grocers Alliance said shoppers could start seeing sticker shock at grocery stores by mid-summer.
“While fuel is not the largest single cost in food, it is the most pervasive,” the group said.
The soaring prices will also fill up state coffers because sales taxes on diesel can reach 13%, which is far higher than than 2.25% tax on regular gas.
With the state consuming between three and four billion gallons of diesel a year, and sales taxes adding about 70 to 80 cents per gallon at current prices, the recent surge will rake in hundreds of millions.
Soaring diesel prices and a huge tax take will renew pressure on Gov. Gavin Newsom to slash the fuel excise.
GOP gubernatorial candidate Steve Hilton has already called for Newsom to take action.
“Any decent governor who cared about regular working people would have done this weeks ago,” Hilton said.
“But Gavin Newsom is an out of touch elitist climate fanatic whose only interest is taking potshots at President Trump to push his pathetic book and presidential campaign.”
The Post contacted Newsom’s office for comment on the record highs.
Now the pain is hitting workers and small businesses on the ground.
Hans Haveman, owner of H&H Fresh Fish, detailed to KSBW what the surge in prices meant for his business.
“You take a big boat like these 80 to 100 foot boats. Some of them are designed to go offshore. There are 2 to 3,000 gallons of fuel. So just do the math at $8 a gallon.
“They better catch fish, or they’re in big trouble.”
The looming price hikes come as many Californians are already grappling with stubborn inflation and one of the highest costs of living in the nation.
