Newsom’s War on Refining Is About to Hit Your Wallet

California is about to face a crisis that Democrat politicians in Sacramento have spent years claiming didn’t exist – but is one that they definitely caused.

Phillips 66 plans to shut down its Los Angeles-area refinery before the end of the year. Valero informed the California Energy Commission that it plans to idle, restructure, or shut down its Benicia refinery by April 2026.

These two actions are not symbolic. Reuters has reported that, together, they make up about 20% of California’s gasoline production. Other sources estimate the impact at roughly 18% of the state’s refining capacity. Whether its 18% or 20%, the issue is still the same. That’s a lot of gasoline that’s no longer available to California drivers.

If Sacramento politicians want a quick summary of the problem, here it is: California is reducing supply faster than demand is declining. When supply decreases and demand remains constant, the so-called “transition” becomes something entirely different: a massive price squeeze paid for by hard-working Californians.

California’s Democrat uni-party sells voters a vision of a near-term, painless break from fossil fuels, as if gasoline is a bad habit that disappears when a Governor scolds the companies that produce, transport, refine, and sell it hard enough.

The state’s own facts about California’s gasoline usage highlight the dilemma the state faces. According to the California Energy Commission, in 2024, Californians bought 13.4 billion gallons of gasoline, and 97% of it was used by light-duty vehicles like cars, pickups, and SUVs. These large figures do not highlight a state trending toward a post-gasoline future. Instead, they show a state that almost entirely dependent on gasoline, while publicly acting as if consumer dependence on the product is rapidly decreasing.

This misleading vision (or a purposely false narrative) is why California’s “long-term plan” to eliminate dependence on gasoline feels like unrealistic political yapping. The statement aims to win elections, attract campaign donations, and get applause from progressives and environmentalists. This rhetoric doesn’t match how millions of people actually live, work, commute, and move goods using petroleum products. The state’s mainstream news outlets blindly follow this false narrative.

When campaign rhetoric exceeds infrastructure, prices take over and speak for themselves. Democrats – welcome to 2026!

Refining is not a hobby. It’s a highly scientific, expensive, heavily regulated process that takes a long time to master at scale. Companies invest many billions of dollars when they see a clear, steady path forward – not two-year political cycles but decades. They pull out, even from America’s largest car-dependent state, when the route ahead is filled with political landmines.

Over the past decade, California Democrats have been very clear about their stance on the industry: not as a partner to work with during a difficult transition, but as a villain to be punished along the way.

Governor Newsom set the tone with his push for a “price gouging penalty.” He said, “Either Big Oil reins in the profits and prices, or they’ll pay a penalty.” Sadly for Newsom, his own state agencies indicated that the “gouging” wasn’t happening.

That didn’t stop the policy pile-on. In October 2024, Newsom signed ABX2-1, which gives the state new tools to require minimum fuel inventories and to compel resupply planning around refinery maintenance.

Whatever California voters think about each measure mentioned above, the overall message to corporate boardrooms is clear and seems to be another nail in the coffin: California’s political leadership naively believes it is creating a future where the refining industry is unwelcome and operational flexibility diminishes – and that a multi-billion-dollar global industry will passively sit by and play Sacramento’s petty political games.

Oil industry executives realized some time ago that they cannot plan for an “orderly transition” while Democrat politicians govern like they’re trying to speed-run the exit.

Below are some statements from oil industry executives. They are important because they are the closest thing to a corporate confession about why California is becoming unworkable.

“The regulatory and enforcement environment is the most stringent and difficult.” Lane Riggs, CEO, Valero

“Our current intent is to close the refinery.” Rich Walsh, EVP, Valero

“We believe California has a number of policies that raise costs, that hurt consumers, that discourage investment, and ultimately we think that’s not good for the economy in California and for consumers,” Chevron CEO Mike Wirth told the Wall Street Journal.

Read those again and notice the theme: policy, regulatory posture, investment discouragement. This planned departure from California is not just “bad luck” or “the market.” This exodus is an operating environment being deliberately tightened, politicized, and made less investable by Democrats.

So, what’s next?

While most U.S. states are experiencing falling gas prices, California continues to move in the wrong direction. When California loses 18% to 20% of its in-state refining capacity, the state becomes more vulnerable to energy shortages. Already high gas prices climb even higher. Any outage, shipping disruption, refinery incident in the few remaining refining facilities, or maintenance event is magnified. The price spikes become more severe because the buffer is thinner.

Here’s the political irony: the same Democrat leaders who spent years shaping public opinion around “Big Oil is the problem” and a so-called “clean energy transition,” are about to face an already financially stretched public that will pay the price for this folly in significantly higher gas prices.

In no uncertain terms - Governor Newsom and California Democrats - YOUR policies drove the industry out of the state and California consumers will pay for your foolish decisions.

California progressives and Democrats can chant “energy transition” all day. It has zero grounding in reality. Drivers, including and especially middle-class and low-income workers, will still pay significantly higher prices at the pump.

So, the next time you hear Democrats in Sacramento crowing about the “affordability crisis,” point to what’s happening with two departing oil refineries and say, “Really?”