California Prepares for Gas Price Surge Amid Refinery Closures

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Drivers concerned over rising gas prices at a California gas station.

News Summary

California faces a potential spike in gas prices as two major refineries announce their closures: the Valero Benicia Refinery in 2026 and Phillips 66 in 2024. Current gas prices are nearing $5 per gallon, with fears that shutdowns could push prices above $8. Lawmakers are concerned about the impact on supply and demand amidst the state’s push to phase out fossil fuels by 2035. Without proactive measures, residents may face significant challenges in future fuel availability and pricing.

California is bracing for a potential surge in gas prices as two major oil refineries announce their closure plans, which are expected to significantly impact supply and demand dynamics in the state. The Valero Benicia Refinery, located in the Bay Area, is set to cease operations in April 2026, while the Phillips 66 refinery in Southern California plans to close within the next year.

Current gas prices in places like Walnut Creek are already nearing $5 per gallon, causing some drivers to spend over $100 to fill their tanks. The impending shutdown of these refineries has raised alarms among lawmakers who fear that the reduced supply of gas could lead to sharp price increases. Estimates from the University of Southern California indicate that gas prices could soar by as much as 75%, potentially pushing costs above $8 per gallon next year.

The looming threat of higher gas prices comes as Governor Gavin Newsom pursues an aggressive agenda to phase out fossil fuels in California. His administration has set a target to ban the sale of gas-powered cars by 2035, although this initiative is currently facing obstacles in the U.S. Senate, which has been blocking certain legislative moves related to the prohibition. The head of California’s Energy Commission has expressed concerns that the closures of the refineries could force the state to rely more heavily on imported gasoline, further complicating the fuel market.

As of now, no legislative measures have been taken by the California Assembly regarding the refineries’ closures, leaving residents and policymakers anxious about the future of gas availability and pricing in the state. The combination of refinery shutdowns, coupled with the state’s push toward an electric vehicle future, raises questions about the balance between immediate fuel needs and long-term environmental goals.

Refinery closures in California are expected to exacerbate an already tense supply situation. The state’s unique environmental policies, which prioritize reducing emissions, complicate the energy landscape as they create a gap between the demand for traditional fuel sources and the availability of those sources. The closures of the Valero and Phillips 66 refineries highlight the fragility of the current supply chain, emphasizing the interconnectedness of local energy production, national policy, and consumer prices.

Amid rising energy costs and the challenges of transitioning to renewable sources, California faces a pivotal moment regarding its energy independence and sustainability practices. Without proactive measures from lawmakers and regulators to address the impending closures, the state may find itself navigating a tumultuous fuel market in the near future.

In summary, California residents should prepare for possible spikes in gas prices as two significant refineries announce their closures. With current gas prices already challenging for many drivers in the state, the prospect of further increases only adds to the urgency of addressing supply shortages that may arise as a result of these closures.