Lawsuit Says Gas Stations Using AI to Inflate Prices in California

A group of California consumers claimed in a lawsuit that gas station owners including Walmart Inc., Marathon Petroleum Corp., BP Plc and 7-Eleven Inc. are using artificial intelligence to illegally manipulate pump prices in the state that already has the highest rates in the U.S.

The companies, which operate more than 1,700 filling stations across the state, are using an AI tool from Kalibrate Fuel Systems Ltd. that automatically adjusts prices based on confidential data at a time when gasoline topped $7 a gallon in some areas, according to the complaint filed Monday in federal court in Sacramento.

Using the algorithm, station owners inflated gasoline by as much as 22 cents a gallon and diesel by 33 cents, on top of already high prices caused by the US war with Iran, the plaintiffs alleged. Every additional penny costs California drivers about $134 million a year, according to the complaint.

Last month, California’s fuel watchdog issued subpoenas to some stations owners over high prices.

The suit is among the first brought under AB 325, a law California passed last year that prohibits the use of shared pricing algorithms. It seeks damages for drivers in the state who overpaid for gas under California antitrust law.

Spokespeople for Walmart, Marathon, BP, 7-Eleven and Kalibrate didn’t immediately respond to emails seeking comment on the suit.