Two large California oil refineries are shutting down, triggering mounting concerns from state legislators, industry groups and many others.

Assemblymember Mike A. Gipson of the Gardena district bluntly described his concern during a recent Sacramento hearing.

“This is a tremendous loss,” Gipson told NBC Los Angeles, referring to the looming closure of the Phillips 66 plant near L.A. “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.”

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Shutting down refinery powerhouses

The Phillips 66 and Valero’s Benicia sites are set to close in 2026. Together, the shutdowns will eliminate nearly 300,000 barrels-per‑day of refining capacity — roughly 20% of the total used in the state.

Valero attributed its decision to “years of regulatory pressure (and) significant fines for air quality violations,” including an $82 million penalty levied in 2024. Phillips 66 similarly cited business challenges stemming from California’s strict environmental regulations.

“They have said that they cannot do business in the state of California,” Gipson reiterated. “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 of California.”

The way Gipson sees it, the state should do everything it can to ensure that its remaining refineries stay in California.

“These companies have been working to make sure they meet these standards, these goals and objectives that the regulatory agencies and legislature have set.”

What’s at stake

With California processing about 24% of its own crude oil needs but consuming a far greater share — some 13.1 million gallons daily — the impact of these closures is significant:

Less supply and higher gas prices

California drivers already pay the highest gas prices in the nation — around $4.85 per gallon, significantly greater than the $3.16 national average.

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With less local supply, experts warn of a potential impact that could range from modest spikes (less than $1 per gallon) to more dramatic spikes if supply disruptions occur. One particular analysis forecasts prices could even soar over $8 per gallon by late 2026.