Phillips 66 will close its Los Angeles-area refinery by late 2025, following the latest wave of regulations pushed by California Governor Gavin Newsom. The refinery shutdown will impact over 900 employees and contractors but also increase fuel prices for consumers in neighboring states like Nevada, where residents already feel the ripple effects of California’s energy policies.
Phillips 66 issued a statement confirming that it would work with the state to ensure fuel markets remain supplied, as the closure of a facility responsible for more than eight percent of California’s refining capacity will disrupt fuel availability.
The closure is part of a broader trend of oil companies exiting California as the state’s aggressive environmental legislation squeezes the industry. The latest blow to California’s fuel infrastructure follows Chevron’s August announcement of its corporate relocation from the Bay Area to Houston, Texas, after more than 140 years in the state.
Critics, such as Assembly Republican Leader James Gallagher, have slammed Newsom’s policies, which they say prioritize political posturing over economic stability.
“Thanks to Gavin Newsom’s showboating and incompetence, hundreds of workers will lose their jobs while California drivers will face a massive price hike,” Gallagher said.
He warned that the ripple effects would extend beyond California, with Nevada and other neighboring states seeing a hike in gas prices due to reduced fuel supply from the West Coast. Nevada, which relies on California refineries for a portion of its fuel supply, will see an immediate increase in gas prices from the Phillips 66 closure.
Fuel experts anticipate that Newsom’s new regulations and a reduced refining capacity could drive prices up by 30 to 50 cents per gallon in Nevada, as the state already grapples with high fuel costs, driven by California’s policies and influence on regional fuel markets.
Newsom has consistently argued that California’s high gas prices are not because of his policies but of price gouging by the oil industry. In May, he signed a gas price gouging law curbing what he described as unfair pricing practices by refineries. Nonetheless, many industry experts and lawmakers see the departure of companies like Phillips 66 and Chevron as a direct consequence of California’s increasingly stringent regulatory environment.
Phillips 66 has already started preparing for the refinery closure, engaging developers to explore future uses for its 650-acre properties in Wilmington and Carson, Calif.
The California Fuels and Convenience Alliance (CFCA), representing fuel marketers and gas station owners, expressed disappointment over the Phillips 66 decision, pointing to the inevitable impact on workers and consumers.
“Every Californian will end up paying higher prices in this government-created energy crisis,” said Alessandra Magnasco, CFCA’s Governmental Affairs Director. “Unfortunately, Nevada and other nearby states will feel the impact as well.”
While Newsom continues to push for California’s transition to net-zero greenhouse gas emissions, the economic fallout of these policies will hit the fuel market hard. With fewer refineries operating under California’s tight regulations, the result will be higher prices at the pump—both in California and beyond—leaving consumers and businesses struggling to cope with the cost of clean energy ambitions.
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