San Diego inflation hits 4.7%, highest since 2023, as gasoline prices jump 29.5% in a year

Consumer prices in the San Diego area rose 4.7% over the 12 months ending in September, the largest annual increase the U.S. Bureau of Labor Statistics has reported for the region since November 2023, when the figure was 5.2%.

The bureau's San Diego-Carlsbad index, released Oct. 14, showed energy prices up 23.3% from a year earlier and gasoline up 29.5%. In the two months ending in September alone, gasoline rose 10.5% and energy 4.5%. The overall local index rose 2.0% in those two months.

Fuel was not the only driver. Prices for everything other than food and energy rose 3.8% over the year in San Diego, compared with 2.6% nationally. BLS listed education and communication, up 14.2%, and shelter, up 2.5%, among the contributors. Food rose 1.9%, with grocery prices up 1.3% and restaurant prices up 2.9%.

San Diego's 4.7% rate is a full point above the national figure. The national Consumer Price Index rose 3.7% for the 12 months ending in September, up from 3.4% in August, according to the BLS release published the same day. Nationally, the gasoline index rose 9.1% in September and accounted for more than half of that month's increase, the bureau said. Gasoline was up 34.2% nationally over the year.

The San Diego index is published every two months. The next report, covering November, is scheduled for Dec. 10.

At the pump, the gap with neighboring states is wide. AAA's San Diego average for regular unleaded was $6.11 a gallon Saturday, compared with $4.71 a year ago. The California average was $6.03. The Arizona average was $4.52, Nevada's was $5.30 and the national average was $4.30. In the Phoenix-Mesa area AAA reported $4.51, and in Las Vegas $5.35.

At those prices, filling a 15-gallon tank costs about $91.71 in San Diego, $67.60 in Phoenix-Mesa, $80.24 in Las Vegas and $64.44 at the national average. That is $24.10 more per fill-up than in Phoenix and $11.47 more than in Las Vegas.

The Federal Highway Administration estimates the average light-duty vehicle in the U.S. burned 460 gallons of fuel in 2024. If San Diego prices held at Saturday's level for a year, that much gasoline would cost about $2,812, compared with $2,073 in Phoenix-Mesa and $2,461 in Las Vegas. A San Diego household with two average vehicles would pay roughly $1,480 a year more than a household in Phoenix. Compared with a year ago, the same 460 gallons costs about $645 more per vehicle in San Diego.

The U.S. Energy Information Administration's weekly survey put California's average retail price for regular at $6.03 on Oct. 19, compared with $4.28 nationally.

Several costs in that price are specific to California. The state excise tax rose to 63.4 cents a gallon on July 1 from 61.2 cents, according to the California Department of Tax and Fee Administration. The state also charges a 2-cent underground storage tank fee. The California Energy Commission estimates the Low Carbon Fuel Standard adds about 18 cents a gallon and the state's carbon-pricing program, which the commission now calls Cap and Invest, adds about 23 cents. The federal excise tax is 18.4 cents.

California also has fewer refineries than it did a year ago. Phillips 66 stopped operating its 138,700-barrel-per-day Los Angeles-area refinery in October 2025, the EIA reported. Valero said it began idling its Benicia refinery in the first quarter of 2026 and completed the shutdown of all processing units in April. In July 2025 the EIA said the two closures together would remove 17% of California's refinery capacity. California has no pipeline links to Gulf Coast refineries, according to the CEC.

State officials attribute the latest price surge to the war with Iran. In a frequently-asked-questions page updated Oct. 23, the Energy Commission said gasoline prices rose worldwide after the conflict began Feb. 28 and shipping through the Strait of Hormuz was curtailed. The commission said about 17% of the crude oil California refiners used before the war came through the strait. It also cited drone strikes on Russian refineries and rising freight and war-risk insurance costs.

The commission said California's price increase since the war began has been "in line with what is happening across the nation." It said California prices run higher than other states because of the state's isolated fuel market, its special smog-reducing gasoline blend, environmental program fees, and state and local taxes. The commission's FAQ does not mention the Phillips 66 or Valero closures.

AAA's figures show San Diego's regular price is up $1.40 a gallon from a year ago. Arizona's average is up $1.17, Nevada's is up $1.50 and the national average is up $1.23.

On Sept. 28, Gov. Gavin Newsom suspended the summer-blend gasoline requirement for the rest of the season so cheaper winter-blend fuel could be sold early, and directed the Energy Commission to publish a regular spot-market price report. His office said "Trump's war in Iran" was driving fuel costs higher nationwide and estimated the war has cost California households $428 each in extra fuel costs. The governor's office did not publish an estimate of how much the early switch would lower prices.

AAA's San Diego average has fallen about 17 cents in the past month, from $6.28.

The next national CPI report, covering October, is scheduled for Nov. 10.