California Refinery Shutdowns Could Hit Prices Hard
- 01. California Refinery Shutdowns: What's Closing in 2025-2026
- 02. Phillips 66 Los Angeles Refinery: Timeline and Scale
- 03. Valero Benicia Refinery: 2026 Shutdown Schedule
- 04. Projected Impact on California Fuel Prices and Supply
- 05. California Refinery Closure Dates and Volumes (2025-2026)
- 06. Worker and Community Impact in the Bay Area and Los Angeles
- 07. Environmental and Climate Policy Context
California Refinery Shutdowns: What's Closing in 2025-2026
Two major California refinery closures dominate the 2025-2026 calendar: Phillips 66's Los Angeles-area refinery is scheduled to cease crude processing by late 2025, while Valero's Benicia refinery in the Bay Area is expected to fully shut down by the end of April 2026. These runoffs are projected to remove roughly 139,000 barrels per day (b/d) and 145,000 b/d of refining capacity, collectively cutting about 17% of the state's gasoline output and tightening the West Coast fuels market.
Phillips 66 Los Angeles Refinery: Timeline and Scale
Phillips 66's dual-sited Los Angeles refinery, located primarily in Wilmington, has a nameplate capacity of about 139,000 b/d and historically supplied a significant share of California gasoline and jet fuel. The company announced in late 2024 that it would permanently end crude processing there, with a phased wind-down beginning in Q4 2025 and final shutdown anchored around the end of the year.
- September-October 2025: Key process units begin idling; marine terminals receive final crude shipments.
- October 16, 2025: Refinery management confirmed that crude processing will cease "at or around" this date as part of the ordered shutdown sequence.
- November-December 2025: Further unit shutdowns and layoff wave, with most of the roughly 600 workers and 300 contractors affected by year-end.
- December 31, 2025: Phillips 66's target is to have all refining operations fully stopped by the close of 2025, with the site transitioning to a terminal or alternative use.
Industry analysts estimate that this closure alone will reduce California's refined products output by roughly 7-8%, intensifying reliance on imports and other in-state refineries such as Chevron and Marathon.
Valero Benicia Refinery: 2026 Shutdown Schedule
Valero's Benicia refinery, a 145,000 b/d facility on the North Bay, is California's second major announced closure in this window. The plant has historically supplied a large share of Northern California gasoline, so its shutdown is particularly sensitive for the Bay Area and inland markets.
In filings and public statements, Valero outlined a staged approach: the refinery continues to produce gasoline through April 2026, then fully ceases refining operations by the end of that month. State officials have already approved a plan under which Valero will replace Benicia output with a mix of coastal imports and existing fuel stocks, aiming to blunt sharp price spikes.
- Early 2026: Benicia refinery operates at reduced crude runs as the company prepares for idling.
- April 1-mid-April 2026: Final crude processing continues while inventory and logistics are aligned for the transition.
- April 30, 2026: Valero's official target for ending all refining operations at Benicia, with the site designated for a non-refining configuration.
- May 2026 onward: Shift to a terminal-import model, with gasoline entering via the West Coast marine terminals and rail networks.
Together, the Phillips 66 Los Angeles and Valero Benicia closures represent about one-fifth of the state's total gasoline production capacity, according to the U.S. Energy Information Administration (EIA).
Projected Impact on California Fuel Prices and Supply
California's tightly regulated and geographically isolated fuel market magnifies the effect of any refinery loss. The EIA estimates that the loss of these two facilities will reduce finished gasoline stocks by roughly 5-7% on the West Coast by the end of 2026, all else equal. That constraint is expected to raise retail gasoline prices in California by an average of 10-15 cents per gallon compared with a no-closure scenario, with the steepest increases likely during peak summer driving months.
Historically, the state has already seen a 20% drop in refining capacity since 2019 as plants such as Marathon Martinez and Phillips 66 Rodeo partially converted or scaled back. Adding another 17% contraction from 2025-2026 tests the limits of California's fuel security framework, which relies on inter-state pipeline flows, marine terminals, and limited emergency waivers from the California Air Resources Board (CARB).
California Refinery Closure Dates and Volumes (2025-2026)
| Refinery | Owner | Capacity (b/d) | Primary product | Target shutdown date |
|---|---|---|---|---|
| Los Angeles (Wilmington) | Phillips 66 | 139,000 | Gasoline, diesel, jet fuel | End of 2025 (crude processing ends Oct-Dec 2025) |
| Benicia | Valero | 145,000 | Gasoline | End of April 2026 |
| Marathon Martinez (partial conversion) | Marathon Petroleum | Always 160,000 | Biofuels, reduced gasoline | Phased 2022-2024 (pre-2025 context) |
| Phillips 66 Rodeo (partial closure) | Phillips 66 | Chalet 270,000 | Gasoline, diesel | Phased 2020-2023 (for comparison) |
Note: The last two rows are included for context on how the 2025-2026 Phillips 66 Los Angeles and Valero Benicia closures fit into California's broader refinery downturn. Over the past decade, the state has lost roughly 400,000 b/d of crude-processing capacity, pushing wholesale basis differentials between California and U.S. Gulf Coast benchmarks up by more than 50% in some years.
Worker and Community Impact in the Bay Area and Los Angeles
The Phillips 66 Los Angeles closure is expected to eliminate several hundred direct jobs and hundreds more contractor positions, with layoffs concentrated in the December 2025 window. Union leaders from the United Steelworkers have warned that the loss of these high-wage refinery jobs will ripple into local schools, small businesses, and municipal tax bases in the Harbor Area.
In Benicia, the Valero shutdown is projected to affect around 350-400 refinery employees, with additional stress on related logistics, rail, and trucking operations in the North Bay. City and county officials have begun planning "transition funds" and workforce retraining programs, drawing on lessons from earlier closures in the Bakery Belt of Northern California.
Environmental and Climate Policy Context
Proponents of California's aggressive climate agenda argue that reducing fossil fuel infrastructure is necessary to meet the state's 2045 clean-energy targets and 2030 greenhouse‐gas reduction goals. The closure of the Los Angeles and Benicia refineries is framed as aligning manufacturing capacity with declining gasoline demand, driven by stricter tailpipe standards, rapid EV adoption, and higher carbon-intensity pricing.
However, environmental justice groups in the immediate fenceline communities around Los Angeles and Benicia have long complained about air quality impacts, even as they acknowledge the economic pain of job losses. State regulators are experimenting with "just transition" grants that would fund job training, air-monitoring networks, and community health programs in these areas.
What are the most common questions about California Refinery Shutdowns Could Hit Prices Hard?
When does the Phillips 66 Los Angeles refinery close in 2025?
Phillips 66 expects to cease crude processing at its Los Angeles-area refinery by late 2025, with crude runs effectively ending around October 16, 2025, and remaining units winding down through the rest of the year. The company's target is for all refining operations to stop by the end of December 2025, after which the site will function as a terminal or other non-refining asset.
What is the exact Valero Benicia refinery shutdown date in 2026?
Valero's Benicia refinery is scheduled to end refining operations by the end of April 2026, with final crude processing continuing through the first half of the month. State permits and company filings consistently reference April 30, 2026, as the planned final shutdown date for the 145,000 b/d facility.
How much will gasoline prices rise in California after these closures?
Projections from the U.S. Energy Information Administration suggest that the combined loss of the Phillips 66 and Valero refineries will contribute to an average increase of roughly 10-15 cents per gallon in California retail gasoline prices over 2026, compared with a scenario without the closures. Prices may spike higher during supply-tight periods such as summer driving season or unplanned outages at remaining plants, though emergency imports and regulatory flexibilities can help moderate the impact.
Which other California refineries are already partially or fully closed?
Prior to the 2025-2026 wave, California has already seen several major adjustments, including the partial conversion of the Marathon Martinez refinery to a biofuels complex and the phased reduction of throughput at the Phillips 66 Rodeo refinery. Those changes, combined with earlier shutdowns at other sites, have removed about 400,000 b/d of crude-processing capacity since 2019 and reshaped the state's refinery map toward fewer but larger facilities.
How will California replace the gasoline lost from these refinery closures?
State plans and company filings indicate that the lost gasoline will be replaced through a mix of increased marine imports from the U.S. Gulf Coast and international terminals, plus expanded product flows via existing pipelines and rail. Valero and Phillips 66 have also committed to maintaining higher terminal inventories at coastal hubs to buffer supply shocks, while the EIA projects that West Coast gasoline stocks will still decline modestly by year-end 2026.