Diesel prices in California have surged to a record high, reaching an average of $7.018 per gallon, as reported by the American Automobile Association (AAA). This marks the highest level ever recorded in AAA’s database, significantly surpassing the current national average diesel price of about $5.345 per gallon.
The spike in diesel prices is attributed to reduced oil-refining capacity and disruptions in global energy shipments, partly due to the ongoing war in Iran. California has faced challenges with two refinery closures since October 2025, leading to a loss of approximately 20% of its refining capacity.
The escalating diesel prices are causing a ripple effect on transportation costs, impacting various sectors such as food, building materials, and retail goods transported by diesel-powered trucks. The limited refinery capacity in California, exacerbated by global disruptions, continues to pose challenges amid the ongoing geopolitical tensions.
“There’s a lot of sleepless nights. There’s a lot of stress, and people just trying to do the best they can,” expressed Andrew Genasci, the executive director of the San Joaquin Farm Bureau, highlighting the financial strain on agricultural operations due to the increased diesel costs.
According to AAA, the current diesel price surpasses all previous records, including those set during the initial months of Russia’s conflict in Ukraine in 2022. The closure of the Strait of Hormuz in the Middle East has further impacted oil shipments, contributing to the sustained high diesel prices, even if the strait were to reopen.
