Overview

• Two major California refineries, Phillips 66 and Valero, are set to close by late 2025 and early 2026, removing 20% of the state’s gasoline production capacity.
• USC Professor Michael Mische projects gas prices could rise from $4.85 to $6.43 per gallon after the first closure and reach $8.43 by the end of 2026.
• Governor Gavin Newsom has directed state agencies to work closely with refiners to stabilize gasoline supply, signaling a shift from his previously confrontational stance toward the oil industry.
• California’s unique fuel blend requirements, high taxes, and strict environmental regulations are cited as contributing factors to refinery closures and rising prices.
• The closures threaten 1,300 direct jobs and nearly 3,000 indirect positions, adding to concerns about economic impacts and energy affordability in the state.