California faces $8.43 gas prices as refineries prepare to close

As of May 2025, California is experiencing significant concerns regarding fuel prices, with projections indicating potential hikes due to the impending closure of two major refineries. The Phillips 66 refinery in Los Angeles is expected to shut down by the end of 2025, and the Valero refinery in Benicia follows suit by April 2026. Together, these facilities contribute roughly 20% of California's gasoline supply, which heightens worries about supply disruptions and price spikes across the state. The situation has been further complicated by California's strict environmental regulations, which have made it more challenging for refiners to remain operational. While some point to corporate price gouging as a factor in escalating fuel costs, independent investigations have found no solid evidence of market manipulation. Instead, structural and regulatory constraints are influencing the ability of refineries to operate effectively, thereby leading to warnings of potential price increases that could strain the budgets of working families and small businesses. In light of these developments, state officials, including California Senate Minority Leader Brian W. Jones, have voiced apprehensions about an exacerbating energy crisis. They stress that if corrective actions are not taken, gas prices might surge to as high as $8.43 per gallon next year, affecting not only Californians but also consumers in neighboring states like Nevada and Arizona, who rely on California's supply. The political backdrop is marked by bipartisan concern over the economic impact of these refinery closures. Some Democrats acknowledge the need to balance environmental goals with energy affordability, arguing that the transition to cleaner energy should not disproportionately burden those already facing high costs. Consequently, California's policymakers are under pressure to find feasible solutions that do not compromise the state's climate ambitions while ensuring a reliable, stable, and affordable gasoline supply for residents.