A group of California consumers filed a lawsuit on Monday alleging that an artificial intelligence-driven pricing system used by major fuel retailers drove gasoline prices higher statewide by reducing competition and enabling coordinated pricing.
The complaint targets pricing technology developed by Kalibrate and its fuel retailing clients, including Marathon Petroleum (MPC), 7-Eleven, Walmart (WMT), Circle K, BP (BP), TravelCenters of America, and Albertsons, among others.
Consumers argue in the filing that Kalibrate's "Fuel Pricing" platform functions as an algorithmic pricing system that integrates competitive market data from nearby fuel stations and recommends retail prices.
The plaintiffs allege that the system reduces price competition among retailers by encouraging simultaneous price increases across markets.
The filing claims that historically, California fuel stations competed by undercutting rivals on price, but that dynamic has shifted as retailers increasingly rely on algorithmic pricing tools.
It alleges that the system enables coordinated pricing responses across competing stations, including what it describes as "market-wide restorations," in which multiple stations raise prices simultaneously.
The plaintiffs further allege that participating fuel retailers have adopted a "price-over-volume" strategy facilitated by the software, resulting in elevated profit margins while consumers face higher pump prices.
California gasoline prices have at times approached $7 per gallon amid global energy volatility, though the complaint argues that crude oil costs, refining expenses, regulation or taxes cannot fully explain local surcharges.
The filing estimates that even a one-cent increase in per-gallon fuel prices in California could translate into about $134 million in additional annual consumer costs, given the state's fuel consumption.
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