Valero is shutting down its Benicia refinery in 2026 and writing off $1.1 billion just to get out of California. This facility alone produces nearly 9% of the state’s gasoline, and its closure follows the recent shutdown of Phillips 66. Together, these exits are set to cripple California’s fuel supply.
Economists from UC Berkeley and Stanford are warning that Californians could see gas prices jump by $1.21 per gallon, with potential spikes to $8 per gallon during supply disruptions. Hundreds of workers are losing their jobs, entire cities are losing major portions of their budgets, and drivers across California, Arizona, and Nevada will feel the pain at the pump.
California is a “gasoline island.” When refineries close, there are no easy alternatives. Instead of producing fuel locally, the state increasingly imports gasoline from overseas — often from countries with weaker environmental and labor standards — while shutting down cleaner, regulated refineries at home.
In this video, we break down:
Why Valero chose to take a billion-dollar loss rather than stay
How refinery closures directly raise gas prices
What this means for blue-collar workers and rural communities
Why California’s energy policies are colliding with economic reality
And whether federal intervention could change the outcome
Is there any turning back now — or is California locked into permanently higher gas prices?
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