Californians pay the highest gas prices in the U.S., and a proposed class action says that the issue has been exacerbated by an AI tool that smartly squeezes customers for the best profits. A newly filed lawsuit at the Sacramento, California, federal court says that gas station operators are using Kalibrate’s AI tool, which uses data from nearby competing gas stations, to drive up prices by as much as 30 cents a gallon in some areas, reports Reuters.
On Monday, gas station operators including BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart, and Albertsons were named as defendents in the headlining class action, alongside Kalibrate. By implementing the AI-driven price-optimizing tool, these operators have allegedly violated the Cartwright Act, California’s main antitrust law, as well as Assembly Bill 325. The latter is a California law that was put in place at the start of 2026 to crack down on algorithmic price fixing. An open-and-shut case, then?
Looking at the numbers, it is easy to understand why the Californians have been spurred into legal action. AAA figures suggest that California residents pay an average of $5.58 per gallon for regular, which is already much higher than the $3.93 national average. Where Kalibrate’s AI tools are used to adjust gas pricing, pump prices have risen as much as 30 cents per gallon, say the complaints. The result is some operators charging as much as $7 a gallon, notes the source report.
Gas station operators “have conspired to put an end to competition”
The key compelling argument behind this class action is quoted by Reuters from the case files. “While families struggle to afford the commute to work, defendants have conspired to put an end to competition, joining an AI-powered trust to ensure that no matter where a driver turns, the price for gasoline is artificially high,” says the complaint.
Currently, it is easy to argue that the rise of AI hasn’t fulfilled its early promises. Sifting through our headlines, it has sparked the RAMpocalypse, and other key PC components like SSDs and GPUs have also been impacted by AI server demand. Moreover, we have seen huge environmental impacts from those AI servers straining infrastructure that is sometimes already under pressure, like electricity generation and water resources. They also cause heat and noise pollution, so people don’t want to be anywhere near them. Then there are the applications we have seen AI used for, thus far. Instead of cancer cures and smart government, we’ve got higher gas prices and divisive social media bots. The complainants are seeking unspecified damages.
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