A group of California motorists has filed a proposed class-action lawsuit in Sacramento federal court accusing major fuel retailers—including BP, Marathon Petroleum, 7-Eleven, and Walmart—of illegally using artificial intelligence to artificially inflate gasoline and diesel prices across the state.

The antitrust lawsuit targets a shared pricing algorithm developed by software provider Kalibrate Fuel Systems (also named as a defendant), alleging it was used to create an automated pricing cartel.

The lawsuit alleges that the fuel giants violated California’s primary antitrust law, the Cartwright Act. Rather than traditional, back-room collusion where executives explicitly agree to fix prices, the plaintiffs argue the defendants engaged in an AI-driven “hub-and-spoke” conspiracy.

  • The Mechanism: The companies collectively operate more than 1,700 gas stations across California. By feeding confidential, real-time proprietary data into Kalibrate’s centralized AI tool, the platform allegedly allowed competing stations to seamlessly coordinate high prices and eliminate independent market competition.
  • AB 325 Weaponization: The lawsuit is among the very first high-profile cases brought under California Assembly Bill 325, an aggressive state law that took effect on January 1, specifically designed to ban algorithmic price-fixing and close the legal loophole of using automated third-party software for market manipulation.

2. Quantifying the Pump Premium

According to the complaint, the economic impact on consumers has been staggering, hitting drivers who were already dealing with elevated global energy costs stemming from the recent U.S. conflict with Iran:

  • The Price Hike: The algorithm allegedly inflated retail gasoline prices by as much as 22 to 30 cents per gallon, and diesel by up to 33 cents per gallon, pushing pump prices to historic levels of nearly $7 a gallon in certain regions.
  • The Multiplier Effect: Because California operates the largest gasoline market in the country, small margins result in massive consumer drains. The plaintiffs calculate that every additional penny per gallon costs California drivers an estimated $134 million annually in collective overpayments.

“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.”

— Excerpt from the filed complaint

3. The Corporate and Regulatory Fallout

The lawsuit surfaces amid a broader, coordinated crackdown on corporate pricing technology. California’s independent fuel watchdog, the Division of Petroleum Market Oversight, had already issued a series of subpoenas to major gas station owners regarding elevated market margins.

When reached for comment following the filing, Walmart stated it is actively reviewing the complaint and will respond appropriately in court, while BP declined to comment. Representatives for Marathon, 7-Eleven, and Kalibrate did not immediately issue statements.

The outcome of the Sacramento case is expected to establish an important legal precedent for algorithmic pricing across other heavily consolidated consumer sectors, such as airline tickets, hotels, and grocery tech, where platforms are increasingly utilizing automated tools to track and match competitor metrics.