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.
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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.
California’s fuel challenges are compounded by the state’s requirement for a specialized gasoline blend known as CARBOB, or California reformulated gasoline blend stock for oxygenate blending.
“This is not regular gasoline. It is a specialized ultra clean burning fuel mandated by California law,” the narrator explained.
“Refineries in Texas, Oklahoma and Louisiana do not make it. You cannot just truck in regular unleaded from Arizona and call it a day.”
Only a small number of refineries worldwide are equipped to produce CARBOB, primarily located in South Korea, India, and parts of Singapore.
As a result, foreign refineries would effectively become California’s primary fuel suppliers as domestic production declines.
“When 17% of in state production disappears, those Asian refineries become California’s gas stations,” the narrator said.
The logistics of importing fuel pose additional challenges. Tanker ships require 30 to 40 days to cross the Pacific Ocean, meaning any disruption can have immediate consequences.
“The fuel you pump into your car in March was loaded onto a ship in January,” the narrator said, warning that storms, equipment failures, or spikes in Asian demand could leave California without adequate fuel supplies.
Data from the California Energy Commission shows the state already reached record gasoline imports in May 2025 at 210,000 barrels per day, even before the planned refinery closures.
Energy consulting firm Stillwater Associates projects that by late 2026, California will need to import 30 percent of its gasoline, nearly one out of every three gallons.
By comparison, the rest of the United States imports less than 5 percent of finished gasoline.
Infrastructure limitations further complicate the situation. Benicia’s port facilities can take four to five days to unload a single 300,000-barrel tanker, translating to just 60,000 to 75,000 barrels per day, roughly half the refinery’s current output.
Expanding import capacity would require new pipelines, storage tanks, and harbor improvements that would take years to complete.
Transport and insurance costs also add to the burden. According to the narration, shipping gasoline from Asia adds 13 to 15 cents per gallon, with marine insurance costing about $20,000 per day per tanker.
California maintains only 11 to 12 days of gasoline inventory, a narrow margin given 40-day shipping times.
“When you depend on 40 day shipping times with 11 days of inventory, any disruption means immediate shortages,” the narrator said.
WATCH:
🚨 WOW! Devastating loss for Gavin Newsom as Valero suffers $1 BILLION dollar loss so they can flee California by 2026.
They’re sick of the mandates and regulations. That’s how bad it’s gotten.
America — pay attention. He wants the White House. pic.twitter.com/rvnPvmWd97
— Eric Daugherty (@EricLDaugh) December 14, 2025
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