California Faces Potential Gas Price Surge Amid Refinery Closures

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A gas station in California shows rising fuel prices as refinery closures loom.

News Summary

California’s gas prices are expected to rise as two major oil refineries, the Valero Benicia and Phillips 66, plan to close in the coming years. The Valero Refinery is set to close in April 2026, while Phillips 66 will cease operations in the next year. Concerns about gas prices exceeding $8 per gallon and increased reliance on imported gasoline have emerged. Governor Newsom aims to phase out fossil fuels by 2035, but legislative hurdles persist. The state’s economic landscape may be significantly impacted as transportation costs rise.

California is bracing for a potential surge in gas prices as two major oil refineries plan to shut down in the coming years. The Valero Benicia Refinery, located in the Bay Area, is scheduled for closure in April 2026, while the Phillips 66 refinery in Southern California is expected to cease operations within the next year. These closures raise concerns among lawmakers and residents about the potential impact on fuel costs across the state.

Currently, gas prices in places like Walnut Creek hover just under $5 per gallon, with some drivers reporting expenses exceeding $100 per fill-up, highlighting the already high cost of fuel in the area. With the imminent refinery closures, experts warn that the dynamics of supply and demand may lead to significant increases in gas prices, projecting a potential rise of up to 75% following these shutdowns. As a result, prices could exceed $8 per gallon within the next year, if these forecasts hold true.

California Governor Gavin Newsom has been vocal about his goal to phase out fossil fuels entirely, targeting the sale of gas-powered cars for a complete ban by 2035. This progressive stance has been met with legislative hurdles, as the U.S. Senate currently blocks implementation of the gas vehicle ban. In the interim, the state must grapple with the consequences of reduced domestic oil refining capacity.

The head of California’s Energy Commission has expressed concerns that the closures could force the state to increase its reliance on imported gasoline. Such a shift could exacerbate existing supply issues and drive costs even higher, further straining consumers and impacting the state’s economy as a whole.

As of now, there has been no legislative action from the state assembly regarding measures to address the refinery closures or mitigate their impact on fuel prices. This inaction leaves many residents anxious about future fuel costs and leads to questions about state preparedness and response to this impending crisis.

The Valero Benicia Refinery is a significant contributor to California’s fuel supply chain, and its planned closure raises immediate concerns for both consumers and lawmakers. With the Phillips 66 refinery also set to close its doors, experts caution that the state’s gas supply could face critical shortages, further impacting prices at the pump.

The economic implications of these closures are potentially severe, as rising gas prices can ripple through the economy, increasing transportation costs and ultimately affecting the price of goods and services across various sectors. The anticipated severity of the gas price increase places additional pressure on the state government to find solutions that can stabilize fuel prices for consumers.

As California prepares for these significant changes, citizens are advised to stay informed about the potential shifts in the energy landscape and remain alert to announcements from state officials regarding legislative efforts and contingency plans. The situation continues to develop, and stakeholders across the state are called to actively participate in discussions about California’s energy future and its implications for residents and the economy.