Overview

• Two major California refineries, Phillips 66 in Los Angeles and Valero in Benicia, are set to close by late 2025 and April 2026, cutting 20% of the state's refining capacity.
• USC Professor Michael Mische projects gas prices could rise to $6.43 per gallon after the first closure and reach $8.43 by the end of 2026 under current market conditions.
• Governor Gavin Newsom has directed state agencies to work with refiners and requested recommendations by July 1 to ensure a stable and affordable gasoline supply.
• California's strict environmental regulations and legislative measures, such as SBX1-2 and ABX2-1, are cited as key factors contributing to refinery closures and rising costs.
• Recent disruptions, including a Bay Area refinery fire, have already led to price increases, highlighting the immediate risk of further volatility in the state's gasoline market.