California’s gasoline market is tightening after the shutdown of the Valero Benicia refinery, marking the second major refinery exit in a short period. With nearly one-fifth of in-state refining capacity disappearing, supply buffers are thinning as summer demand approaches. Limited import flexibility increases volatility, and a USC expert now warns prices could climb as high as $8.45 per gallon if constraints persist.

California faces a tightening energy outlook in 2026 as refinery closures reduce gasoline supply while electrification, data centers, AI, and logistics steadily raise baseline electricity demand. Energy costs are likely to remain high and volatile, increasing the cost of doing business. Consumers—especially in underserved cities like Compton—face higher fuel, utility, and living costs with few practical alternatives, risking greater economic strain and inequality.