CA refinery shutdown to spike gas prices in Nevada and Arizona

With Valero announcing the pending closure of one of its two remaining California refineries, the state will lose at least 18% of its current refining capacity by the end of 2026.

Because California is an “energy island,” meeting demand for California and the parts of Nevada and Arizona that rely on its refineries will require costly imports of volatile fuel by emissions-heavy tanker ships.

California Gov. Gavin Newsom has long blamed rising gas prices on refiners’ “price gouging,” but even though his own administration has said that it has no found no evidence of such, he called a special legislative session last year to pass new refinery regulations that both Democratic and Republican governors of neighboring states warned would lead to price hikes and supply shortages.

Now, with the closure announcement, the warnings from the energy industry and regional leaders are coming to fruition.