Drivers in Washington were paying an average of $4.658 per gallon of regular gas on September 15, outpacing California’s $4.653, as reported by the American Automobile Association (AAA). The shift reflects a combination of local tax changes, refinery disruptions, and broader supply issues affecting the West Coast.
Gasoline prices remain a closely watched economic indicator in the U.S., particularly in states where geography, regulation, and infrastructure often collide. California has long topped the price rankings due to strict environmental standards and higher fuel taxes, making this change both surprising and significant. While the gap between the two states is narrow, the underlying causes point to broader pressures in the fuel supply chain along the Pacific coast.
For consumers and policymakers alike, the change is more than just a regional reshuffling—it hints at how interconnected state markets are, especially when disruptions ripple across refineries and pipelines. And for drivers in Washington, the reasons behind the recent price surge are both local and beyond state borders.
Tax Hikes and Climate Policy Push up Prices
One of the main factors behind the surge in Washington’s gas prices is a significant tax increase introduced this summer. On July 1, the state’s gas tax climbed from 49.4 cents to 55.4 cents per gallon.
Under current legislation, this rate is set to rise by 2 percent annually starting in 2026 to match inflation. Diesel taxes saw a similar bump, rising by 3 cents this year, with more increases scheduled through 2028.
This tax adjustment came alongside a hike in Washington’s CO2 emissions fee under the Climate Commitment Act, which added another 6 cents per gallon earlier this summer. As detailed in Newsweek, these increases are being passed directly to consumers at the pump, compounding the financial impact of fuel price changes.
While these measures are part of broader climate efforts, their timing coincided with other challenges in the fuel market, amplifying their effect on gas prices.
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Refinery Disruptions across the West Coast
Patrick De Haan, head of petroleum analysis at GasBuddy, highlighted several refinery-related issues—both planned and accidental—that have played a central role in Washington’s price spike. A fire in February at the Martinez Refining Company in the San Francisco Bay Area triggered a 21-cent-per-gallon jump in Washington fuel prices, even though the incident occurred across state lines.
More disruptions are on the horizon, with Phillips 66 set to shut down its Los Angeles refinery by October and Valero closing its Benicia facility by April 2026. Since the West Coast states are heavily interdependent when it comes to refining capacity, these closures are expected to tighten regional supply lines.
American Automobile Association (AAA) analysts have pointed out that refinery issues in both Puget Sound and California have caused wholesale prices to climb, which in turn are being reflected at retail pumps.
On top of that, Newsweek notes a reported outage at the Olympic Pipeline, a key fuel artery connecting Washington refineries to Portland, which has added to the supply squeeze just as maintenance disrupted several major facilities.
California’s Slight Dip Opens the Door
While California continues to deal with some of the highest gas prices in the country, its average has actually declined from $4.770 one year ago to $4.653 today, as outlined by AAA data. That modest drop opened the way for Washington to slide into first place.
Price trends in California reflect a mix of steady demand, gradual supply stabilization, and perhaps short-term adjustments in local wholesale markets. In contrast, Washington is now the only state where gas prices have increased year-over-year. De Haan emphasized this unusual pattern, noting that no other state is seeing a similar rise compared to 2024.
With Hawaii and Oregon not far behind at $4.478 and $4.293 respectively, the West Coast continues to dominate the national gas price rankings. Meanwhile, the rest of the country remains below the $4 mark, with the national average at $3.177, underscoring the regional disparity in fuel costs.
