California Gas Prices Expected to Exceed $8 By 2026 Due to Refinery Closures

California faces a potential fuel crisis as two major oil refineries—the Phillips 66 refinery in Los Angeles and the Valero refinery in Benicia—are set to close by April 2026, which could reduce the state's refining capacity by roughly 21%. According to a study by USC’s Michael A. Mische, this shutdown may cause gasoline prices to surge up to 75%, reaching between $7.35 and $8.44 per gallon by the end of 2026, with even higher prices expected in some remote counties. The refinery closures, combined with new state regulations and fees, could create a gasoline supply shortfall of 6.6 to 13.1 million gallons per day, disrupting multiple supply chains and negatively impacting California’s economy and tax revenues. Lawmakers, including Senate Minority Leader Brian W. Jones, have urged Governor Gavin Newsom to take immediate action to prevent the shutdowns, suggesting options such as tax credits, regulatory relief, and postponing the 2035 gasoline vehicle ban. Experts warn that California may become reliant on out-of-state and foreign refineries to meet its fuel needs, which could exacerbate supply vulnerabilities. The closures and rising gas prices threaten to increase living costs and strain household budgets across the state.