By LifeZette News Staff
California drivers are facing the prospect of the highest gasoline prices in U.S. history as major refinery closures threaten to significantly reduce in-state fuel production, according to analysis outlined in a narrated video examining the shutdown of key facilities.
The most immediate blow comes from Valero’s decision to close its Benicia refinery by April 2026, a move that carries a reported $1.1 billion write-off for the company.
The refinery currently processes 145,000 barrels of oil per day, accounting for roughly 8.6 percent of California’s total gasoline production.
“Valero just wrote off $1.1 billion that is the cost they are taking to walk away from California rather than keep operating their Benicia refinery past April. 2026 when a company takes a billion dollar loss just to leave you know, something is seriously broken,” the narrator said.
The closure has immediate economic consequences beyond fuel supply.
According to the narration, “400 workers have lost their jobs. 200 contractors are out of work. The city of Benicia loses 17% of its entire budget.”
The loss of refining capacity is expected to drive sharp increases at the pump.
Economists at the University of California, Davis estimate that gas prices will rise by 40 cents per gallon when Phillips 66 shuts down its Los Angeles-area refinery in December 2025.
An additional 81-cent increase is projected when Valero’s Benicia refinery closes four months later.
“That totals a $1.21 cent per gallon increase by August. 2026 your 15 gallon fill up jumps from $70 to at least $95,” the narrator said.
Other projections are even more severe.
The Stanford Energy Institute has warned of potential price spikes reaching $8 per gallon during supply disruptions. UC Berkeley energy economist Severin Borenstein, who has tracked California energy markets for decades, has cautioned that the closures could lead to severe gasoline shortages and unprecedented price increases.
The timeline outlined in the narration shows a rapid loss of capacity.
“In December, 2025 Phillips, 66 in Wilmington closes, 139,000 barrels per day are lost. In April, 2026 Valero in Benicia closes, 145,000 barrels per day are lost in just four months. California loses 284,000 barrels of daily refining capacity, 17% of the state’s total production,” the narrator said.