California is bracing for a potential energy and economic crisis as gas prices could surge by 75% to $8.43 per gallon by 2026, according to a stark warning from Senate Minority Leader Brian Jones.

This alarming projection follows the announced closures of two major refineries, raising concerns about fuel supply, consumer costs, and the broader economic impact.

The Phillips 66 refinery in Los Angeles and the Valero refinery in Benicia are set to shut down by the end of 2026, reducing California’s gasoline production capacity by approximately 20%.

According to Newsweek, these closures will leave the state with only seven refineries, exacerbating an already strained fuel supply chain.

Jones argues that this loss will destabilize the state’s fuel market, drive up prices, and increase reliance on out-of-state and foreign oil, posing risks to both economic stability and national energy security.

California already has the highest gas prices in the continental U.S., often exceeding the national average by over a dollar per gallon.

A spike to $8.43 per gallon would intensify the state’s cost-of-living crisis, hitting working families hardest.

The closures also threaten jobs, with the two refineries directly employing 1,300 workers and supporting nearly 3,000 additional jobs through economic ripple effects.

Beyond the pump, higher fuel costs could drive up prices for everyday goods, further straining household budgets.

Jones has criticized Governor Gavin Newsom’s energy policies, particularly high taxes, strict environmental regulations, and special fuel standards, which he claims make refinery operations financially unviable.

In a letter to Newsom, Jones urged immediate action, proposing solutions like investment tax credits and regulatory relief to keep the refineries open.

He warned that failure to act could lead to a “self-inflicted gas price crisis,” a concern he previously raised in a 2024 op-ed.

Newsom, however, has recently adopted a more cooperative stance. In a letter to the California Energy Commission, he emphasized the need to maintain a reliable gasoline supply during the state’s transition to clean energy.

He called for recommendations to secure fuel availability over the next two decades.

This shift comes amid growing political pressure as Newsom navigates criticism over rising costs and his broader clean energy ambitions.

Beyond the refinery closures, other factors are pushing gas prices higher.

The California Air Resources Board’s updated Low Carbon Fuel Standard, which mandates cleaner but costlier fuel blends, is expected to raise retail prices by up to 65 cents per gallon in 2025.

Additionally, Assembly Bill X2-1, signed into law in October 2024, requires refineries to maintain a ready stock of gasoline, adding an estimated 4.7 to 27 cents per gallon to costs. An automatic increase in the state’s gasoline excise tax will further contribute to the price hike.