Goodbye to gas prices in California, Nevada and Arizona: the major change that will cause prices to skyrocket starting in October

Back in October, US multinational energy company Phillips 66 announced its plans to wind up operations at its Los Angeles refinery in Carson - one of the 11 refineries currently in operation nationwide.

Phillips 66 to close another 100-year-old Californian refinery

Built in 1923, the Los Angeles Refinery consists of two facilities linked by pipeline located five miles apart in Carson and Wilmington, 15 miles southeast of LAX airport. The two facilities currently employ around 600 staff and 300 contractors, processing crude oil to produce transportation fuels (gasoline, diesel and aviation fuel).

However, the LA refinery’s days are numbered. Back in the fall, Phillips 66 announced that both facilities’ would close down by the end of 2025 after which the company will work with the state to supply fuel markets and meet ongoing consumer demand.

The LA refinery currently processes 165 million barrels of crude per day, producing 85 kb/d of gasoline and 65 kb/d of diesel and jet fuel.

Looking to the facility’ long-term future, Phillips 66 made the decision that keeping the refinery open is simply not viable.

“We understand this decision has an impact on our employees, contractors and the broader community,” said Mark Lashier, chairman and CEO of Phillips 66. “We will work to help and support them through this transition.”

The company is gradually shifting its focus towards renewables and developing drop-in liquid fuels from solid biomass or solid waste streams, renewable hydrogen and alternative high-octane fuel blend stocks. In 2023, it closed its Rodeo refinery in the San Francisco Bay area, to convert the site into a Renewable Energy Complex.

It’s still not known what will happen to the Los Angeles refinery site once it closes later this year although according to some reports, the company is in talks with real estate developers.

“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” Lashier explained in a statement. “Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands.”

Gavin Newsom signs energy bill

Just a few days before Phillips 66 announced plans to cease operations at its Los Angeles refinery, California Governor Gavin Newsom signed the ABX2-1 energy bill - legislation designed to help prevent gas price spikes and save consumers money at the pump. The move by the California government requires refiners to maintain minimum gasoline inventories and to have a plan to prevent shortages during maintenance outages. As the state is geographically isolated from US Gulf Coast and Midwest refining centers, it must either produce all its own fuels or import them from Asia.

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