Gas Prices

txab · 2026-07-15T21:15:29Z

Lauren Fix

Is AI quietly deciding what you pay at the gas pump?

How the algorithm picks drivers' pockets.

Every time tensions flare somewhere in the world, gasoline prices seem to jump overnight. Drivers expect it. The news blames geopolitics, oil traders blame uncertainty, and politicians blame each other. But here's the question almost nobody is asking: If computers can raise prices within hours, why do they suddenly become so patient when it's time to lower them?

Americans have lived with this frustration for decades. The price of crude oil climbs, and gas stations respond almost immediately. Crude oil falls sharply, and suddenly we're told to be patient. Refiners need time. Distributors need time. Retailers need time. Somehow, that urgency only seems to work in one direction.

Regulators have already gone after algorithmic pricing in apartment rentals, and they're looking at hotel rooms, airline tickets, and online retail.

Now a new California lawsuit and a federal push to investigate gasoline pricing suggest there may be another piece of the story that deserves far more attention. It isn't simply about oil markets anymore. It's about artificial intelligence, algorithms, and whether software designed to maximize profits is quietly changing how fuel prices are set across America.

If that sounds like something out of a science fiction movie, think again.

Kalibrating the market?

Kalibrate is a real pricing platform. The company markets its software as an advanced pricing solution that analyzes competitor prices, wholesale costs, local demand, traffic patterns, and countless other variables before recommending the "optimal" price at the pump. By the company's own marketing, it serves many of America's largest fuel retailers and convenience store chains. Retailers use it because it promises to increase profit margins while staying competitive.

There is nothing inherently illegal about any of this. Every major industry now runs on data analytics.

The concern begins when pricing software stops simply reacting to the market and starts shaping it.

On June 22, three California drivers filed a federal class-action lawsuit in Sacramento — and they didn't just sue the software company. They sued the gas stations. Kalibrate is the lead defendant, but so are Marathon, BP, Circle K, 7-Eleven, Speedway, Walmart, Sam's Club, and Albertsons. According to the complaint, Marathon alone runs more than 1,000 ARCO stations in California and has been letting Kalibrate set prices at them since 2020. Circle K, plaintiffs claim, has more than 400 stations on the software. Albertsons, they allege, has been using it since at least 2009.

The complaint alleges that Kalibrate allowed competing retailers to share competitively sensitive information and receive pricing recommendations that discouraged aggressive competition. It describes a "restoration" feature that plaintiffs say lets nearly all the stations in a market raise prices at the same time.

It also quotes Kalibrate's marketing, which according to the complaint tells operators that even in the face of "falling oil prices ... it's critical to avoid a race to the bottom," and warns that cutting your price to win customers "could be making a change that triggers a downward spiral." The plaintiffs call the platform the "central nervous system for a conspiracy to extinguish retail price competition among gas stations."

Price pumping

What does that cost you? Research cited in the complaint found that stations switching to this kind of software raise prices by about 6 cents a gallon on average — and by as much as 30 cents where most of the stations in an area are running it. Plaintiffs point to a real-world example too: They allege that when one California Albertsons turned Kalibrate on, its pump price climbed 3 to 4 cents within days. That sounds small. It isn't. By the complaint's math, a single penny on the statewide average drains $134 million a year from California drivers' wallets.

Kalibrate says it disagrees with the allegations, calls its technology lawful, and intends to defend itself. The retail chains have not yet answered the complaint. No court has ruled on any of it.

But what happens when thousands of competing businesses begin relying on the same algorithm to determine prices?

Price fixing has been illegal in California for more than a century, and the plaintiffs are suing under that old law. What's new is a statute that took effect on January 1 — AB 325, the Preventing Algorithmic Collusion Act — which says plainly that you cannot escape a price-fixing charge by routing the conspiracy through software. Using pricing software is still perfectly legal, but using it to coordinate with your competitors is not.

AB 325 makes it unlawful to use or distribute a "common pricing algorithm" — software that uses competitor data to recommend, align, or stabilize prices — as part of an agreement to restrain trade. Whatever you think of Sacramento, it closed that loophole first, and this case is the first real test of it.

The A-word

Washington is applying pressure of its own — though it is worth being precise about what kind.

On July 3, the Department of Justice and the Federal Trade Commission sent every state attorney general a letter urging them to investigate whether antitrust violations or price gouging are keeping gas prices artificially high. "Recent volatility in crude oil prices does not suspend either the antitrust laws or state consumer protection laws," they wrote, "and it does not authorize companies to manipulate retail prices or collude with their competitors." The letter followed President Trump's complaint, posted to Truth Social on June 23, that falling crude prices weren't reaching drivers.

But read that letter closely and you'll notice something. It never mentions algorithms. Not once. The federal government is going after gas prices with the same tools it has always used, while the argument about the software is being made by three drivers and their lawyers in a Sacramento courtroom. Nobody in Washington has said the word yet. And whether any of these investigations turns up illegal conduct remains to be seen.

Anyone who has driven for more than a few years knows the pattern. Prices spike within days of a geopolitical event, then drift down at a painfully slow pace. Economists even have a name for it: the "rockets and feathers" effect, and they have studied it for decades. Researchers point to several reasons, including inventory replacement costs, consumer behavior, and local competition. None of those explanations necessarily involve illegal activity.

Dirty work

But artificial intelligence introduces an entirely new variable.

Unlike traditional pricing models, today's software can monitor competitors continuously, process enormous amounts of market data instantly, and recommend price changes faster than any human pricing manager ever could. If dozens or even hundreds of competing retailers rely on similar recommendations generated from comparable market data, the practical result may be less price competition — without anyone ever picking up the phone to coordinate prices.

That possibility isn't unique to gasoline.

Regulators have already gone after algorithmic pricing in apartment rentals, and they're looking at hotel rooms, airline tickets, and online retail. The Justice Department sued RealPage over the software landlords used to set rents and settled the case last November. The concern in every case is the same: that algorithms may accomplish indirectly what competitors have long been prohibited from doing directly.

It's worth being precise about what that settlement did and didn't say. RealPage paid no penalty, and the government made no finding that it broke the law. What the DOJ objected to was the use of nonpublic information from competing landlords — not the software itself. Using an algorithm to price your product isn't illegal. Feeding it your competitors' private numbers is where the trouble starts. That distinction is going to decide the gas station case too.

Technology moves faster than regulation.

Thin margins

This debate also exposes another misconception. When Americans get angry about gas prices, they aim that anger at the oil companies. In reality, what you pay at the pump includes crude oil costs, refining expenses, transportation, taxes, distribution, and retail pricing. Gas stations generally operate on thin per-gallon margins — the National Association of Convenience Stores puts the net at roughly a dime a gallon once credit card fees and operating costs come out — while state taxes and regulatory costs can dramatically affect what you pay locally, particularly in a state like California.

If gasoline prices are rising because of global supply disruptions, consumers may not like it, but they can understand it. Markets move. Wars affect energy. Hurricanes interrupt refining.

But if pricing software is reducing competition by encouraging retailers to move together instead of competing aggressively for customers, consumers deserve answers.

Artificial intelligence is quietly becoming the invisible middleman in countless financial decisions Americans make every day — insurance rates, airline tickets, hotel rooms, online prices, and now what you pay every time you pull up to the pump.

Most consumers never know an algorithm was involved; they simply assume that's what the market decided.

Algorithms don't care whether you're commuting to work, driving your kids to school, or trying to keep your small business afloat. They don't understand household budgets or family vacations. They optimize. That's what they were built to do.

The question was never whether artificial intelligence can set prices more efficiently. It's whether we've quietly allowed machines to redefine what competition means.

Because if software can determine the price of something as essential as gasoline today, what will it be deciding tomorrow?

https://www.theblaze.com/lifestyle/is-ai-quietly-deciding-what-you-pay-at-the-gas-pump

Atlas · 2026-07-15T22:24:08Z

It's the Middle East conflict that raised prices, not AI. But nice distraction.

Grumpy Bear · 2026-07-15T22:34:57Z

7 minutes ago, Atlas said:

It's the Middle East conflict that raised prices, not AI. But nice distraction.

SPECULATION on the wars effect raised prices. AI is maximizing the profit. Refining is vertically integrated.

Atlas · 2026-07-15T22:49:31Z

12 minutes ago, Grumpy Bear said:

SPECULATION on the wars effect raised prices. AI is maximizing the profit. Refining is vertically integrated.

If we're talking futures, yes, it's speculation.

The spot price of a delivered barrel is elevated now compared to before the conflict. And that is related more to current supply/demand.

CamGTP · 2026-07-15T23:18:42Z

$4.00 a gallon here now.

Diesel nearly $5.00 again.

Grumpy Bear · 2026-07-15T23:52:27Z

1 hour ago, Atlas said:

If we're talking futures, yes, it's speculation.

The spot price of a delivered barrel is elevated now compared to before the conflict. And that is related more to current supply/demand.

If we actually used any significant amount of that source in the USA then I'd agree but we don't. We've had that discussion before. We drill and pump more than we use. Thing is, we sell. We export. Gas and Crude. It's more profitable so any shortage here is self inflicted and LEGAL. :rollin:

I worked a gas plant that has multiple fuel sources available and I worked in the furnace and boiler plant in that facility. I'd had days we swapped fuel types four times in a twelve hour shift which isn't done on supply but on margin. Two of the fuel sources are internally generated. Tail gas and DAK, both of which are sold as well a consumed. We always had more than we needed to run the process but we chose the fuel that produced the best margin not bought at the cheapest price always. A good bit of math to that and back in the time that was done on a slide rule. :crackup:

I worked the Shale Oil Semiworks of Chevron Research and CONOCO Research in Salt Lake City. That process never went into production although it was very successful. Why? Did we lack oil bearing shale? Nope. Price of crude never made the margins work. That was in the late 70's early 80's. Remember history? What was happening then was a reaction to that situation. It didn't drive it. If so then it's easy. This isn't a supply and demand thing. This is a profit and margin thing and AI rules that now.

In no refining situation that I was ever in would a bomb hitting a well anywhere in the world 'instantly' interrupt or even distress the supply. Most plants have more than a months worth of crude in the tank field and more in pumping stations. That yo-yo could play out over days, weeks and maybe months and have zero impact on plant operations. How many times has this been off and on in the last few months? These people and not stupid. These plants measure down time in hundreds of thousands of dollars per day. They are not sucking fumes or waiting on the next truckload with baited breath. Besides, as I noted, they are for the most part 'vertically integrated'. They own it from the dirt is sits in to the delivery rack and sometimes to the pump. It has a HUGE shock absorber built in. When production suffers, refining wins and when refining is winning exploration is killing. The rest of that crap in the news is a 'news cycle'. Government dipping in to reserves? Oil is stealing their milk money. There's a reason Chevron abandon Venezuela infrastructure and it had nothing to do with security of US citizens. Nationals run those plants. it has to do with MARGINS disappearing to corruption. They are in no hurry to return. Is there supply there? Oh yea. More than enough to offset what is bought in the middle east. Just isn't ???? Profitable.

We have supply. There are places in Illinois you can drive a pipe into the ground and run your homes natural gas furnace on it.

A refinery fire will gum up the supply works but not a localized war where the market is using a limited supply from. Now Europe, that's something other....

Edited 20 hours ago by Grumpy Bear

Atlas · 2026-07-16T01:59:51Z

1 hour ago, Grumpy Bear said:

If we actually used any significant amount of that source in the USA then I'd agree but we don't. We've had that discussion before. We drill and pump more than we use. Thing is, we sell. We export. Gas and Crude. It's more profitable so any shortage here is self inflicted and LEGAL.

I worked a gas plant that has multiple fuel sources available and I worked in the furnace and boiler plant in that facility. I'd had days we swapped fuel types four times in a twelve hour shift which isn't done on supply but on margin. Two of the fuel sources are internally generated. Tail gas and DAK, both of which are sold as well a consumed. We always had more than we needed to run the process but we chose the fuel that produced the best margin not bought at the cheapest price always. A good bit of math to that and back in the time that was done on a slide rule.

I worked the Shale Oil Semiworks of Chevron Research and CONOCO Research in Salt Lake City. That process never went into production although it was very successful. Why? Did we lack oil bearing shale? Nope. Price of crude never made the margins work. That was in the late 70's early 80's. Remember history? What was happening then was a reaction to that situation. It didn't drive it. If so then it's easy. This isn't a supply and demand thing. This is a profit and margin thing and AI rules that now.

In no refining situation that I was ever in would a bomb hitting a well anywhere in the world 'instantly' interrupt or even distress the supply. Most plants have more than a months worth of crude in the tank field and more in pumping stations. That yo-yo could play out over days, weeks and maybe months and have zero impact on plant operations. How many times has this been off and on in the last few months? These people and not stupid. These plants measure down time in hundreds of thousands of dollars per day. They are not sucking fumes or waiting on the next truckload with baited breath. Besides, as I noted, they are for the most part 'vertically integrated'. They own it from the dirt is sits in to the delivery rack and sometimes to the pump. It has a HUGE shock absorber built in. When production suffers, refining wins and when refining is winning exploration is killing. The rest of that crap in the news is a 'news cycle'. Government dipping in to reserves? Oil is stealing their milk money. There's a reason Chevron abandon Venezuela infrastructure and it had nothing to do with security of US citizens. Nationals run those plants. it has to do with MARGINS disappearing to corruption. They are in no hurry to return. Is there supply there? Oh yea. More than enough to offset what is bought in the middle east. Just isn't ???? Profitable.

We have supply. There are places in Illinois you can drive a pipe into the ground and run your homes natural gas furnace on it.

A refinery fire will gum up the supply works but not a localized war where the market is using a limited supply from. Now Europe, that's something other....

What I think you're saying is there is supply here at home, and in Venezuela, and we could ease pricing if only it were favorable to do so.

Well, yes?

But that's not the current market. Supply isn't what could someday exist, if only, it's what producers are willing to produce and sell at a certain price point.

The national price of single family homes would come way down if we'd just slap together a few million homes this summer.

RAM and GPUs would get a lot cheaper if we just set up some factories to produce a bunch more and stopped using it to build out AI data centers.

Grumpy Bear · 2026-07-16T04:06:36Z

2 hours ago, Atlas said:

What I think you're saying is there is supply here at home, and in Venezuela, and we could ease pricing if only it were favorable to do so.

Well, yes?

But that's not the current market.

That sir is a choice. And even if it were not for all the reasons stated, this disruption has zero to do with the reality of the actual logistics and everything to do with the greed of SPECULATION. Spot price is irrelevant to reality.

Atlas · 2026-07-16T04:39:58Z

19 minutes ago, Grumpy Bear said:

That sir is a choice. And even if it were not for all the reasons stated, this disruption has zero to do with the reality of the actual logistics and everything to do with the greed of SPECULATION. Spot price is irrelevant to reality.

I understand that. The price is what it is, though. The price is what oil costs today, where our choices have led us, where supply is, and where demand is, in the market that is. Speculation is for futures, what we think the price will be, but with incomplete information at the time the price is forecast. I know you know this, but you appear to be intent on making a secondary point here about what you think the market could or should be, if only other choices.

In 1975 it became illegal to export US Crude. I'm conflicted on what the best answer is. Free markets allow export in pursuit of profit. But there is also a lot to gain by producing and consuming our own oil here. How do you reconcile it?

PhilB · 2026-07-16T11:48:58Z

7 hours ago, Atlas said:

In 1975 it became illegal to export US Crude.

That ban was lifted in 2015.

https://www.pillsburylaw.com/en/news-and-insights/us-repeals-longstanding-ban-on-export-of-crude-oil.html

diyer2 · 2026-07-16T13:21:30Z

It is what it is, pay the price, gotta have it.

Grumpy Bear · 2026-07-16T13:58:04Z

8 hours ago, Atlas said:

In 1975 it became illegal to export US Crude. I'm conflicted on what the best answer is. Free markets allow export in pursuit of profit. But there is also a lot to gain by producing and consuming our own oil here. How do you reconcile it?

1 hour ago, PhilB said:

That ban was lifted in 2015.

https://www.pillsburylaw.com/en/news-and-insights/us-repeals-longstanding-ban-on-export-of-crude-oil.html

Thank you Phil

https://uscommodityprice.com/difference-between-spot-price-futures-price/

Read the entire article but pay attention to the paragraph on 'Convergence at Expiration" and how the futures telegraphs the spot price. At delivery they are the same. Pump price responds directionally to the futures price. No they are not the same but at delivery they are indistinguishable. Good thing to or you'd be paying a thousand dollars a gallon for the stuff.

8 hours ago, Atlas said:

How do you reconcile it?

There is an definitive answer with an absolute and assured result. However that answer cannot be discussed on this site.

But I can say this. It is beyond the ability of any human or any group of humans no matter how well meaning. We have had thousands of years to prove we could and the results are dismal. Until then we have this:

25 minutes ago, diyer2 said:

It is what it is, pay the price, gotta have it.

And there it is.

txab · 2026-07-16T17:21:16Z

19 hours ago, Atlas said:

It's the Middle East conflict that raised prices, not AI. But nice distraction.

Not a distraction. You miss the point of the article. It's not just for today's situation. Another way AI is being used and it may explain some of the prices changes when there is no apparent event to cause a 25 cent jump out of nowhere, only to immediately, the next day, begin to drop by 2 cents and so on. These situations were happening before the Iran thing fired off.

I used to be in the retail gas/service business. Pretty much a $1 increase in WTI would increase my price by maybe .10 cents. Now WTI can go down and retailers can get hit with a .35 cent increase out of nowhere.

I thought it was interesting read, since this is being used on all products we buy now

Edited 2 hours ago by txab

Atlas · 2026-07-16T17:33:10Z

10 minutes ago, txab said:

Not a distraction. You miss the point of the article. It's not just for today's situation. Another way AI is being used and it may explain some of the prices changes when there is no apparent event to cause a 25 cent jump out of nowhere, only to immediately, the next day, begin to drop by 2 cents and so on. These situations were happening before the Iran thing fired off. I thought it was interesting

I don’t. The source is a far-right fake news site perpetuated by Glenn Beck. Funny how you clean up political posts and then regurgitate garbage from politically tainted sites.

txab · 2026-07-16T18:10:47Z

The "source" a woman, that writes the article is not a far right person. She's pretty well known "car person". She writes her own stuff, but yes it is initially posted under the Blaze, because they purchased the right to post it first, before it is posted on her own sites. It doesn't mean the info is any less valid. the article itself is not political It's not meant to discount any current actions in the Iran

Only posted the link because that's what has to be done to be legal to post the article. The Blaze is not a site I use. Lauren Fix's page pointed me there and I have to use a bypass method to look at the article since I'm not about to join the site. I've posted articles over the years from the Lefty sites, seems you didn't have a problem with that.

But you do you, keep looking at everything only through left/right lenses.

The 3 or 4 of you that participate in the some of the comments had ample chance to read everything. Other members that don't care for it, send in comments, because as they will point out, political talk is discouraged. Both "sides" complain