According to a new report, gas prices in California could increase up to 75% by the end of 2026 as the state prepares to lose nearly one-fifth of its oil refining capacity.
The scheduled closure of the Phillips 66 refinery in Los Angeles, along with Valero’s planned shutdown of its facility in Northern California, represents a potential 21% reduction in California’s refining output over three years, according to a report by Michael A. Mische of USC’s Marshall School of Business.
“The estimated average consumer price of regular gasoline could potentially increase by as much as 75% from the April 23, 2025, price of $4.816 to $7.348 to $8.435 a gallon by calendar year end 2026. We can expect retail prices to be even higher in counties such as Mono and Humboldt,” Mische wrote.
California currently consumes more than 13.1 million gallons of gasoline daily. With the state producing just under 24% of its crude needs, the loss of refining capacity could create a deficit of 6.6 million to 13.1 million gallons per day.
Some lawmakers are sounding the alarm after the report, sending a letter to Gov. Gavin Newsom urging him to “stop the refinery closures.”
“If the Governor doesn’t act now, Californians will be blindsided by sticker shock at the pump and skyrocketing prices on everyday goods,” Senate Minority Leader Brian W. Jones (R-San Diego) said in a statement. “We’re talking about gas prices over $8.43 per gallon by the end of next year.”
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