California, August 25, 2025
News Summary
California is grappling with a significant gasoline supply crisis as two major refineries, Phillips 66’s Wilmington facility and Valero’s Benicia plant, prepare to close. The shutdowns threaten 18% of the state’s refining capacity, potentially causing gas prices to spike by 15 to 30 cents per gallon. This move could worsen the existing affordability crisis impacting businesses and working families, leading to higher operational costs. In response, Governor Gavin Newsom has proposed legislation to stabilize the petroleum market and enhance local oil production, though it faces criticism from environmental groups.
California is facing a significant gasoline supply crisis as two major refineries prepare to close, jeopardizing 18% of the state’s refining capacity. The anticipated shutdowns of Phillips 66’s Wilmington facility and Valero’s Benicia plant promise to disrupt fuel availability, leading experts to predict a spike in gas prices of 15 to 30 cents per gallon in the near future.
This impending situation is being described as an affordability crisis that will impact both businesses and working families, exacerbating existing economic pressures throughout the state. Gas prices in California are already well above the national average, projected to stand at $1.47 more than prices across the United States in 2025. This financial strain may further worsen if the expected closures take effect.
The California Energy Commission (CEC) is responding to these potential refinery shutdowns amidst fears about fuel availability. Assemblymember Cottie Petrie-Norris has convened an oversight hearing to discuss the implications of the refinery closures. During the session, she underscored the urgent need for transparency and action in light of how these closures will affect California’s gasoline supply and prices.
California’s economy, particularly sectors such as advanced manufacturing, life sciences, technology, and tourism in regions like Orange County, heavily relies on affordable fuel. Thus, the disruption in refining operations may ripple throughout various industries and result in higher operational costs as businesses pass on the increased expenses to consumers.
Longstanding concerns exist about California’s regulatory environment affecting local oil production and refining operations. Lawmakers have expressed frustration regarding state regulators’ decisions, suggesting that they do not adequately consider the impact on consumers. As a response to these challenges, Governor Gavin Newsom has proposed legislation aimed at stabilizing the petroleum market and increasing local oil production. This includes fast-tracking drilling permits in specific regions and ensuring the continued operation of some refineries.
This proposed legislation has drawn criticism from environmental groups, who argue that it favors the oil industry at the expense of environmental protections. The controversy highlights a shift in California’s relationship with the petroleum industry, suggesting a potential for closer collaboration to ensure a stable fuel supply amid a complex regulatory landscape.
In light of these refinery closures, California may need to rely more on imported fuel, which may not align with the same rigorous environmental standards applied to in-state production. Analysts caution that such a shift could heighten price volatility for consumers, following the threatening disruption in supply caused by the refinery closures.
Overall, as state regulatory agencies prepare to discuss these implications with key officials in the Legislature, the challenge remains to balance the need for affordable fuel with environmental responsibilities and the impact of regulatory decisions on consumer prices.
Frequently Asked Questions (FAQ)
What refineries are closing in California?
Phillips 66’s Wilmington facility and Valero’s Benicia plant are set to close, which will impact 18% of the state’s refining capacity.
How will these closures affect gas prices?
Gas prices are expected to rise by 15 to 30 cents per gallon in the short term due to the closures.
What are the economic implications of the refinery closures?
The closures could create an affordability crisis for businesses and working families, increasing operational costs and leading to higher prices for goods and services across various sectors.
What legislation is being proposed in response to this crisis?
Governor Gavin Newsom has proposed legislation to stabilize the petroleum market and enhance local oil production, including fast-tracking drilling permits to ensure the continued operation of some refineries.
Deeper Dive: News & Info About This Topic
- Energy at Haas: California’s Refinery Closure Drama
- Google Search: California refinery closure news
- San Diego Union-Tribune: A Do-Over for Newsom
- Wikipedia: Oil refinery
- Kron4: Gas Prices Could Soar with Refineries Closing
- Encyclopedia Britannica: Gasoline
- Reuters: California Steps to Find Buyer for Valero Refinery
- Google Scholar: California gas price impact
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
