The decision by Phillips 66 to close its refinery in Wilmington, California, represents a significant challenge to the state’s efforts to transition away from gasoline while maintaining stable fuel prices. The refinery closure will eliminate over 8% of California’s crude oil processing capacity, likely driving up gasoline prices as the state relies more on imported fuel.
Analysts warn that this could be especially problematic during market disruptions, as the local refinery will no longer be available to help with resupply.
The move comes shortly after Governor Gavin Newsom signed legislation aimed at forcing refineries to store extra gasoline to prevent price spikes. However, Phillips 66 stated that the decision was based on the long-term sustainability and profitability of the refinery, rather than a direct response to this new law.
State Senator Steve Bradford expressed concerns about job losses and environmental impacts from increased fuel imports, while environmentalists and consumer advocates supported the closure as a step toward reducing pollution. The refinery’s shutdown highlights the broader tension between California’s environmental goals and the economic impacts on fuel supply and prices as the state continues its shift away from fossil fuels.
As California’s refinery landscape consolidates, concerns over price manipulation and supply shortages persist, though Phillips 66 has pledged to maintain supply levels. Nonetheless, importing fuel will likely increase costs, adding to the already high prices Californians pay at the pump.