California is staring at a fuel crunch that could push drivers into territory that once sounded like a scare tactic: double digit prices at the pump. With Valero preparing to walk away from a key refinery in 2026 and other plants already shuttered or converted, the state’s fragile fuel system is being tested just as global markets remain volatile and climate rules tighten. The question is no longer whether prices will rise, but how far they can climb before political and economic pressure forces a reset.
Behind the headline-grabbing projections of $12 gasoline lies a deeper concern about energy security for the world’s fifth largest economy and for the United States as a whole. As refineries close faster than alternatives scale up, California risks trading one kind of vulnerability, dependence on oil, for another, dependence on imported fuel and distant supply chains.
How California became the epicenter of America’s fuel anxiety
California’s fuel market has always been different, with its own cleaner-burning gasoline blend, aggressive climate policies, and a long history of environmental battles around refineries. That distinct path is now colliding with hard arithmetic: fewer local refineries, rising demand from a still car‑dependent population, and limited pipeline connections to the rest of the country. When a state that large leans heavily on a shrinking set of plants, any disruption, from maintenance to accidents, can ripple quickly into price spikes.
Two of the most important facilities in this story are the refineries operated by Valero and other majors around the San Francisco Bay and Los Angeles regions, which have long anchored the state’s supply of gasoline, diesel, and jet fuel. Reporting on California refineries and related industrial hubs underscores how concentrated this infrastructure has become, with a handful of complexes feeding fuel to tens of millions of residents. When those hubs are threatened, the entire regional economy feels exposed.
Valero’s Benicia exit and the 145,000 barrel question
The single most consequential move on the horizon is Valero’s plan to exit its refinery in Benicia, a city tucked along the Carquinez Strait northeast of San Francisco. That plant is not a marginal asset. It is a 145,000 barrel per day facility that helps feed gasoline, diesel, and asphalt into the broader Bay Area and beyond. Losing that capacity in 2026 would instantly tighten an already narrow margin between supply and demand, especially during peak driving seasons…