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2mo ago

California Gas Prices Could Surge to $8 Per Gallon as Refinery Closures Loom

Governor Newsom intensifies efforts to stabilize fuel supply as bipartisan warnings highlight potential consumer impacts from regulatory pressures and capacity losses.

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California Gov. Gavin Newsom addresses members of the Campaign for a Safe and Healthy California campaigning for Keep The Law (SB 1137) in Ladera Hills area of Inglewood, Calif., on Friday, March. 22, 2024. California Gov. Gavin Newsom, Arnold Schwarzenegger and Jane Fonda are calling on voters to keep a law banning new oil and gas wells near homes, schools and hospitals as the oil industry fights to overturn it. The campaign is to keep the 2022 law. (AP Photo/Damian Dovarganes)

Overview

  • Two major California refineries, Phillips 66 in Los Angeles and Valero in Northern California, are set to close by the end of 2026, reducing the state's refining capacity by 21%.
  • USC research projects a 75% increase in average gasoline prices, potentially reaching $8.43 per gallon by late 2026, with some counties seeing even higher prices.
  • California's unique fuel system, isolated from external pipelines, leaves the state vulnerable to supply disruptions and price volatility.
  • Governor Gavin Newsom has directed the state to collaborate with refiners to ensure a stable and affordable fuel supply, despite criticism from lawmakers over the impact of recent environmental policies.
  • California drivers are currently paying an average of $4.78 per gallon, already the highest in the nation, compared to the $3.15 national average.