Arizona Gas Prices Set to Soar as Phillips 66 Closes Refinery

By Matthew Holloway |

The Phillips 66 Los Angeles Oil Refinery is set to cease operations in October, marking a significant shift in California’s energy landscape. After 102 years of refining, this closure reduces the number of operating refineries in California to just eight, raising concerns about the stability of fuel supply chains for California, Arizona, and Nevada.

California’s fuel regulations, which incorporate the Low Carbon Fuel Standard, have aimed to reduce emissions through a blend of 90% petroleum and 10% ethanol in gasoline. However, the imminent shutdown threatens to escalate fuel prices across the region for gasoline, diesel, and aviation fuels.

With the Phillips 66 facility accounting for approximately 8.57% of California’s refining capacity, its closure ripple effects are being felt beyond state borders. Bipartisan appeals from the governors of Arizona and Nevada urged California Governor Gavin Newsom to reconsider proposed legislation that would prioritize in-state fuel needs over external demand.

Arizona’s Governor Katie Hobbs and Nevada’s Governor Joe Lombardo issued a joint statement highlighting the potential impact of increased regulatory burdens. They warned that such measures would lead to higher costs for consumers reliant on California’s fuel pipelines.

Responding to concerns, a spokesman for Newsom stated that the law would protect Californians from price spikes, claiming it would empower the state to require refiners to maintain supply levels during maintenance periods. However, no assurances were offered for Arizona and Nevada in this context.

California Republican Assemblywoman Kate Sanchez criticized the impending changes, predicting that gas prices would soar and more refineries would close. She attributed these developments to legislative pressures that undermine affordability for residents.

In contrast, Newsom accused Hobbs and Lombardo of echoing industry narratives, defending the state’s regulatory framework as necessary for managing fuel stability. He signed the controversial bill despite objections from the neighboring governors.

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.