California on the Brink as Refinery Shutdowns Threaten $8 Gas

California is on the verge of a fuel crisis that will hit drivers, workers, and entire communities hard. By 2026, two of the state’s largest refineries are set to shut down, eliminating nearly 17 percent of California’s refining capacity. As reflected in these comments, legislative leaders are becoming aware of what these closures will mean to California’s ability to meet its own fuel needs, but also disrupt the broader supply chain that keeps the state powered and moving.

Assemblymember Mike A. Gipson, who represents Gardena, called the Phillips 66 closure “a tremendous loss.” He stressed, “The jobs that it holds, the individuals … working each and every day, those individuals live in my district, they shop in my district, they add to the economy in my district.”

Both refining companies highlight California’s uncertain environmental regulations and heavy fines as reasons for their decisions to close. Gipson explained, “They have said that they cannot do business in the state of California,” adding, “The regulatory agencies have imposed on the refiners of California very stringent regulation that makes it very difficult for them to remain in the state.”

The California Independent Petroleum Association and its staff have been in the Capitol building, ensuring legislators understand that the impact will ripple far beyond the refinery gates. The shutdowns threaten more than 1,300 direct jobs, thousands more in related industries, and millions in lost tax revenue for local communities. Oil producers who supply these facilities will see reduced demand, forcing cutbacks and layoffs that will weaken the state’s energy workforce.

Legislators and staff are being reminded that Californians already pay about $4.65 per gallon, the highest in the nation, compared to the $3.16 national average. Analysts warn prices could soar past $8 per gallon by late 2026. Fewer refineries mean more imported fuel, higher shipping costs, increased emissions from long-distance transport, and a far more fragile supply chain.

As USC Professor Michael Mische warned, “California can ill afford the loss of one refinery, let alone two.” This is an energy problem and a statewide economic emergency in the making, and the clock is ticking.