Lawmakers in California warn that refinery closures, such as Valero’s Benicia facility and Phillips 66’s Los Angeles plant, could raise fuel prices and increase the state’s reliance on foreign oil. California already has the highest gas prices in the country, at about $4.34 per gallon. Refinery closures could deepen this dependence and impact military fuel supply chains.

Valero announced the closure of its Benicia refinery in 2026 due to high operating costs and strict environmental regulations, spending around $1 billion to exit. California’s energy crisis could intensify, with reduced refining capacity potentially driving up fuel prices. The state’s unique geographic isolation makes it difficult to replace lost supply when refineries shut down.

Regulatory pressure, environmental violations, and compliance costs contributed to Valero’s decision to close the Benicia refinery. California’s strict energy policies, like the Low Carbon Fuel Standard, add challenges for refiners in a constrained market. Fines totaling $82 million were imposed on Valero in 2024 for toxic chemical releases and violations.

California currently imports around one-fifth of its refined petroleum products, with the potential for deeper dependence if refineries close. This reliance on international supply chains could pose risks if geopolitical tensions escalate, affecting military preparedness and consumer gas prices. The Newsom administration disputes claims that state energy policies threaten national security.

In response to potential fuel price increases, California drivers can shop around for lower prices and consider timing fill-ups earlier in the week. Long-term solutions may involve rethinking transportation choices to mitigate the impact of persistently high fuel costs. The state has passed energy bills aimed at stabilizing fuel markets while transitioning to cleaner energy sources.

Read more at Yahoo Finance: California refinery closures seen as US security risk as Valero exits in 2026 and gas prices reach $12/gallon