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According to AAA, gas prices in the United States rose 16% last week. The average price of regular gas is now $3.45 per gallon. However, if the forecast markets are correct, the price of a gallon in the US may rise by the end of March. That could leave states like California paying up to $7 per gallon.
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WTI crude oil prices rose from $66 to $90.90 on February 20. This has led to a rise in financial ETFs such as the US Oil and Gas Exploration ETF (IEO). Consumers can feel the pinch in the future as rising barrel prices cause pain at the pump.
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California drivers already pay some of the highest gas prices in the country, and the Middle East violence could push them into shock territory. National gas prices are already skyrocketing, and California could get a little worse.
According to AAA, the national average gas price through March 8, 2026 sits at $3.45 per gallon, up 16% in the past week. Prediction markets at PolyMarket place a 63% chance that national prices will reach $4.50 by the end of March, with a 34% chance that prices will rise to $5.00 per gallon.
Let’s take a look at why there may be pain at the pump a lot in the Golden State. Our findings: Regular gas prices in California will soon rise above $7 a gallon. The pain will be felt across the country, but the West Coast will feel it the worst.
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California’s average gas price is already $5.159 per gallon as of March 8, 2026, according to AAA, dramatically above the national average. California is really in Another league Compared to gas prices in most states.
The second most expensive state is Washington at $4.60 per gallon. Hawaii’s average gas price is $4.51 per gallon. Then Oregon pays $4.19 per gallon and Nevada $4.18. No other state in the country paid more than $4 per gallon as of March 8. Also, remember that it is Average price for regular gas!
And some areas of California are very expensive. Gas in northern counties like Tehama costs $4.77 per gallon, while Silicon Valley stations in San Mateo average $5.41.
As you can see, the most expensive gas in the United States is almost purely a West Coast phenomenon. Let’s dive into more details on why this is.
California isn’t paying more just because of fuel prices. The state operates a special CARB-compliant fuel blend that cannot be imported from other states, creating a nearly isolated market. Add in some of the highest gas taxes in the country, a cap-and-trade carbon program that adds costs at the refinery level, limited pipeline connectivity to major U.S. oil hubs, and a handful of refineries facing shutdowns, and the construction premium per gallon is ripe.
For the wider West Coast, there are a number of reasons that gas is more expensive. The Rocky Mountains make it difficult to connect the West Coast to the vast US pipeline network. In addition, most of the refinery capacity sits along the Gulf Coast.
The West Coast is often more affected by oil price shocks because it is more isolated.
Then there are other fees as we mentioned above. Washington and Oregon generally have higher taxes on gasoline and added environmental regulations. There’s a reason why Arizona gas costs $3.84, while California costs $5.16 and Washington costs $4.60.
California has historically traded at a significant premium to the national average, and that gap has widened as environmental regulations have tightened. This isn’t temporary disruption — it’s structural. When national rates rise, California premiums are maintained or expanded.
And here’s where we get to the staggering forecast of $7 per gallon in California.
The truth is, it isn’t Our prediction, These are the markets!
PolyMarkets forecast markets currently give a 63% chance that the national average for gas prices will be $4.50 or higher by the end of March. Forecast markets have a 34% chance that gas prices will exceed $5 by the end of the month.
If that happens and the West Coast price moves in line with the national average, here’s the price you might see in the West Coast states.
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At a national average of $4.50, California’s average price will come to about $6.73 per gallon.
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At a national average of $5, California’s average price will come to about $7.48 per gallon.
Again, these are not numbers that we randomly draw; This is what prediction markets are currently placing near probability or probability.
If supply disruptions continue, the US West Coast should prepare for some significant gas price hikes.
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