CALIFORNIA – California lawmakers are in talks to allocate $80 million to $200 million in state funds to support Valero Energy Corp.’s Benicia refinery, according to Bloomberg.
The discussions aim to delay the refinery’s planned closure by April 2026.
Regulators issued Valero an $82 million fine for air quality violations in October 2024. Six months later, the company announced its intent to “idle, restructure, or cease operations” at the Benicia refinery.
If the closure proceeds, it would be California’s second refinery shutdown in recent years.
Phillips 66’s Los Angeles refinery is set to close by the end of 2025, citing long-term uncertainty, declining profitability, and market dynamics.
Operational winding-down there could begin as early as September.
Gas prices could reach $8.43
A recent USC Marshall School of Business report projected that closing both refineries could push gas prices in California to $8.43 a gallon.
Governor Gavin Newsom’s office dismissed the report, claiming it was bankrolled by Saudi Arabia utilizing the scientific method of “guessing.”
Bloomberg reports lawmakers are eager to keep the Benicia refinery open and discussed a state cash infusion for maintenance and upgrades over the weekend.
The goal may be to prevent gas prices from spiking while the state advances its transition to electric vehicles.
RELATED: CA lawmaker calls Newsom’s critique of USC professor’s $8.43 gas price prediction ‘petty’
