Gas Stations Accused of Using AI to Boost California Prices

The companies, which operate more than 1,700 filling stations across the state, are using an AI tool from Kalibrate Fuel Systems Ltd. that automatically adjusts prices based on confidential data at a time when gasoline topped $7 a gallon in some areas, according to the complaint filed Monday in federal court in Sacramento.

Using the algorithm, station owners inflated gasoline by as much as 22 cents a gallon and diesel by 33 cents, on top of already high prices caused by the US war with Iran, the plaintiffs alleged. Every additional penny costs California drivers about $134 million a year, according to the complaint.

Last month, California’s fuel watchdog issued subpoenas to some stations owners over high prices.

The suit is among the first brought under AB 325, a law California passed last year that prohibits the use of shared pricing algorithms. It seeks damages for drivers in the state who overpaid for gas under California antitrust law.

Walmart, in a statement, said it is “reviewing the complaint and will respond appropriately in court. BP declined to comment. Spokespeople for Marathon, 7-Eleven and Kalibrate didn’t respond to emails seeking comment on the suit.

Gas prices in California have been closely watched by the state’s energy regulator after Governor Gavin Newson signed a series of bills in 2023 and 2024 bolstering oversight of the industry.

The highest pump prices in the country have been a pain point for Newsom, who is expected to make a bid for the 2028 Democratic presidential nomination and has softened his once-hostile approach to the state’s dwindling fuel-making industry. California’s fuel prices also have become a rallying point for the Trump administration, with Energy Secretary Chris Wright touting a controversial offshore oil-drilling project in the state.