California Considers Paying Valero to Keep Fuel Plant Open

California Democrats are reportedly looking at the possibility of giving Valero millions in aid to keep a fuel plant in the San Francisco area running. This comes after years of enforcing strict regulations that have led to the closure of major refineries.

With two refineries already shut down and new regulations on the horizon, gas prices in California have become a significant concern for lawmakers. According to a recent Bloomberg report, discussions are taking place about allocating between $80 million and $200 million in state funds to ensure the Benicia refinery remains operational.

The Benicia refinery is slated to close by April 2026, and the proposed funds would primarily go toward routine maintenance, which is one of the major expenses for such facilities, as noted by Bloomberg.

When questioned about the situation and the handling of refinery closures, California Governor Gavin Newsom’s office stated they had no information to share.

As worries mount over rising gas prices tied to these refinery closures, Republican state Senator Tony Strickland indicated that prices could exceed $8 per gallon, attributing this to Newsom’s policies.

Strickland remarked that with both Valero and Phillips 66 set to exit California next year, predictions suggest gas prices could reach that alarming threshold.

The California Energy Commission recently voted to suspend a resolution that imposed government price controls on fuel for the next five years, further complicating the situation.

Energy expert Ted Cordova also highlighted at a press conference that refinery closures not only threaten to increase prices but could also create national security issues.

Back in July, it was reported that the California Energy Commission sought assistance from Valero to prevent the Benicia facility from closing. A spokesperson for Newsom previously indicated efforts to work with oil refiners and stabilize fuel supplies.

Currently, California holds the title for the highest gas prices in the U.S., averaging $4.62 per gallon, as per data from the American Automobile Association (AAA). This figure has risen from an average of $4.496 to $4.627 recently, contrasting with a more favorable average of below $4.711 in 2024.

As of now, Valero has not responded to requests for comment.