‘Californians will be blindsided’: Gas prices could surge 75% to over $8/gallon in the Golden State by 2026 — here’s what’s driving the pending crisis (and what you can do to prepare now)

What is causing this drastic increase?

According to KTLA 5 News, the potential increase is primarily driven by the scheduled closures of two major oil refineries. The Phillips 66 refinery in Los Angeles and Valero’s facility in Northern California are both slated to shut down, removing approximately 21% of the state’s refining capacity over the next three years.

"Weak refining margins, rising regulatory compliance costs, softening demand for gasoline and the push for lower-carbon alternatives like batteries and renewable diesel have each contributed to a steady decline in California’s refining capacity the past few years," writes Robert Auers in a blog post for RBN Energy LLC.

"Now, Phillips 66’s plan to idle its 139-Mb/d Los Angeles Refinery in Q4 2025 will leave the Golden State with only seven conventional refineries producing gasoline, diesel and jet fuel — a couple of dozen fewer than it had 40 years ago."

The closure of these two refineries could lead to a daily deficit of 6.6 million to 13.1 million gallons of gasoline, as California currently consumes over 13.1 million gallons daily while producing less than 24% of its crude oil needs. Lawmakers have expressed concern over the potential economic impact and have urged Governor Gavin Newsom to intervene and prevent the refineries from closing.

“If the Governor doesn’t act now, Californians will be blindsided by sticker shock at the pump and skyrocketing prices on everyday goods,” said Senate Minority Leader Brian W. Jones in a written statement.

A spokesperson for the governor said that efforts are underway to maintain a stable fuel supply and protect Californians from steep price increases.

“Just last month, the governor directed the state to redouble efforts to work with refiners to ensure a safe, affordable and reliable supply of gasoline,” Daniel Villaseñor, a spokesperson for Governor Newsom, shared with KTLA 5 News. “Governor Newsom will keep fighting to protect Californians from price spikes at the pump."

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How to navigate rising gas prices in California

As of now, California already has some of the highest gas prices in the country, with averages exceeding $5 per gallon in certain areas. If prices rise to the projected $8.43 per gallon, California would further solidify its position as the state with the most expensive gasoline.

To mitigate the impact of rising fuel costs, residents can consider several strategies:

Look for fuel discounts: Membership-based retailers like Costco often provide lower fuel prices. Some grocery stores also offer points per dollar spent to help offset gas prices.

Carpooling: Sharing rides can significantly reduce individual fuel expenses. Consider riding to work with a colleague or sharing driving duties with a family at your child's school.

Limit your driving: Be mindful of when and where you drive. For example, you can consolidate nearby errands and make them all in one trip. Also, consider working remote more often, if that is an option.

Invest in fuel-efficient vehicles: Transitioning to a vehicle with higher fuel economy, or switching to an electric vehicle, can offer long-term savings. California also offers a variety of tax rebates and incentives for electric cars.

Use public transportation: California's major cities, including Los Angeles, San Francisco and San Diego, offer extensive public transit systems including buses, light rail and commuter trains. However, the state offers limited alternatives to driving outside of the major hubs.

While these measures can help, the state's infrastructure may limit alternatives to driving for many residents. Continued investment in public transportation and policies to rein in the costs of fuel will be critical to address what could become a gasoline crisis in California.