A group of California drivers has filed a proposed class action lawsuit against some of the country’s biggest fuel retailers, accusing them of using artificial intelligence to keep gasoline prices artificially high. The lawsuit targets major operators including BP, Circle K, Marathon, 7-Eleven, Walmart, Albertsons, and pricing software provider Kalibrate.
Filed in the U.S. District Court for the Eastern District of California, the complaint alleges that the companies relied on AI-powered pricing technology to monitor competitors’ fuel prices and coordinate increases rather than compete fairly. The plaintiffs argue that this practice forced motorists to pay significantly more at the pump.
Allegations of AI-Based Price Coordination
According to the complaint, Kalibrate’s pricing software collects real-time market data from competing gas stations and recommends prices based on competitor activity. Drivers claim that instead of encouraging healthy competition, the technology helped fuel retailers maintain higher prices across California.
The lawsuit argues that when a large number of stations in a region use the same pricing platform, competition weakens because businesses begin responding to identical pricing recommendations. As a result, gasoline prices allegedly rose by as much as 30 cents per gallon in several areas.
The plaintiffs claim even a one-cent increase in fuel prices translates into approximately $134 million in additional annual costs for California drivers.
New California Law Faces Its First Major Test
The legal action also references California Assembly Bill 325, which came into effect on January 1, 2026. The law was introduced to address concerns surrounding algorithmic price fixing and the growing use of artificial intelligence in setting consumer prices.
The lawsuit alleges that the defendants violated both the state’s Cartwright Act, California’s primary antitrust law, and the new legislation designed to prevent companies from using algorithms to coordinate pricing decisions.
Legal experts say the case could become one of the first significant tests of how courts interpret laws regulating AI-driven pricing systems.
Consumers Feel the Impact
California has consistently recorded the highest average gasoline prices in the United States. According to AAA, regular gasoline currently averages around $5.58 per gallon in the state, well above the national average of $3.93.
The plaintiffs argue that while taxes, environmental regulations, and supply issues have historically contributed to higher fuel prices in California, coordinated algorithmic pricing may have added another financial burden for consumers already struggling with rising living costs.
The lawsuit states that families commuting to work and managing everyday expenses have been unfairly affected by pricing practices that allegedly prioritized profits over competition.
Companies Yet to Respond in Court
The defendants collectively operate more than 1,700 gas stations across California. While some companies declined to comment publicly, others did not immediately respond to media requests following the filing.
The lawsuit seeks unspecified financial damages on behalf of California drivers who allegedly paid inflated fuel prices due to the use of AI-assisted pricing tools.
As artificial intelligence becomes increasingly integrated into retail pricing decisions, the outcome of this case could influence how businesses across multiple industries use pricing algorithms in the future. If the court finds that AI-based pricing systems facilitated anti-competitive behaviour, the ruling may set an important legal precedent extending well beyond the fuel industry.
