Valero(US:VLO) Yahoo Finance·2025-12-17 23:45Group 1: Refinery Closures and Impact - California lawmakers are warning that the planned shutdown of Valero's Benicia refinery and Phillips 66's Los Angeles plant could eliminate nearly 20% of the state's in-state refining capacity, potentially driving up fuel prices and increasing dependence on foreign oil [1][2] - Valero's Benicia refinery, which has operated for about 25 years, will close in 2026 due to high operating costs and strict environmental regulations, with the company reportedly spending around $1 billion in preparation for the exit [2][6] - The reduction in refining capacity is expected to exacerbate California's existing energy crisis, potentially affecting not only fuel prices but also the state's military supply chain, with implications that could extend to national concerns [3] Group 2: Current Fuel Prices and Projections - California currently has the highest gas prices in the U.S., with drivers paying approximately $4.34 per gallon as of December 2025, which is about $1.40 more than the national average of around $2.90 [4] - In extreme scenarios, gas prices in California could reach between $10 to $12 per gallon, according to petroleum experts [4] - The geographical isolation of the West Coast from major refining hubs complicates the replacement of lost supply, as the Benicia and Los Angeles facilities account for about 17% of California's refining capacity, despite being less than 2% of total U.S. refining capacity [5] Group 3: Regulatory Environment - Valero has cited years of regulatory pressure, environmental violations, and a recent lawsuit settlement as reasons for closing the Benicia refinery, with California's regulatory environment described as the most stringent in North America [6] - California's Low Carbon Fuel Standard requires fuel producers to reduce the carbon intensity of gasoline and diesel, which, while aimed at reducing greenhouse gas emissions, adds compliance costs for refiners operating in a constrained market [6]