The closure of one of Southern California\u2019s major oil refineries may come a bit sooner than expected.<\/p>\n
According to a report from Reuters<\/a>, Phillips 66 will start the process of shutting down operations at the company\u2019s twin facilities in Carson and Wilmington as early as this week.<\/p>\n That\u2019s about one month sooner than expected. Reuters cited two unnamed sources for its story.<\/p>\n Regardless of when the Phillips 66 eventually completes the closures, the shuttering of the 139,000-barrel-per-day facilities in the Los Angeles area figures to tighten fuel supplies and put upward pressure on gasoline prices in the region.<\/p>\n In an email exchange with the Union-Tribune, a spokesperson for Phillips 66 would not confirm the Reuters report but did not deny it, either.<\/p>\n \u201cI cannot comment on refinery operations,\u201d said Al Ortiz, head of the company\u2019s media operations, \u201cbut I will note that the process of idling the facilities requires a complex, multi-phased approach. The refinery units will begin idling by (the fourth quarter of 2025) as planned.\u201d<\/p>\n The news comes as gas prices in Southern California have ticked up in the past two weeks. The average price of a gallon of regular in San Diego has increased 14 cents in the past two weeks, landing at $4.691 on Tuesday, according to AAA<\/a>.<\/p>\n But some fuel analysts aren\u2019t sure if the recent bump is related to the upcoming Phillips 66 closure or not.<\/p>\n \u201cI don\u2019t know that the start of the shutdown is impacting California in a physical way yet,\u201d said Patrick DeHaan, head of petroleum analysis at GasBuddy<\/a>, \u201calthough it certainly could be taking a psychological toll, simply knowing that the market is going to be tighter in the next month or two \u2014 maybe enough to lead to some of the increases we\u2019re talking about.\u201d<\/p>\n Denton Cinquegrana, chief oil analyst at OPIS<\/a>, the Oil Price Information Service that provides data and forecasting on global energy, suspects the increase at the pump \u201chas a lot to do with the fact that oil\u2019s up about $4 or $5. It\u2019s probably as simple as that.\u201d<\/p>\n The price of West Texas Intermediate, the benchmark for crude produced in the U.S., has risen from $61 a barrel on May 30 to more than $65 on Monday<\/a>. Brent crude, the international benchmark, has risen from just over $61 a barrel to $68 in the same time frame.<\/p>\n In October, Phillips 66 announced<\/a> plans to close the Carson and Wilmington facilities by the end of 2025. The company did not give a specific reason but said it \u201cwill work with the state of California to supply fuel markets and meet ongoing consumer demand.\u201d<\/p>\n Then Valero in April of this year gave notice it will shut down operations at its refinery in the Northern California city of Benicia by 2026.<\/p>\n The CEO of the San Antonio-based company said<\/a>, \u201cCalifornia has been pursuing policies to move away from fossil fuels for the past 20 years, and the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America.\u201d<\/p>\n The Valero and Phillips 66 facilities combine to account for\u00a0roughly 18% of the state\u2019s crude oil capacity<\/a>, raising concerns<\/a> that the closures will strain supplies of the specially blended gasoline that is sold to California drivers and drive up prices at the pump.<\/p>\n Going forward, \u201cCalifornia is obviously going to become a lot more dependent on imports of gasoline and the components that go into making gasoline,\u201d Cinquegrana said. \u201cOverall, California\u2019s going to be walking a little bit of a tightrope here.\u201d<\/p>\n In response to fears of gasoline price spikes, Gov. Gavin Newsom and the California Energy Commission have taken a much more accommodating approach to the state\u2019s petroleum industry.<\/p>\n The commission on Friday postponed until 2030 imposing financial penalties on oil refiners if they make what the state considers to be excessive profits.<\/p>\n \u201cI personally truly believe that this pause will be beneficial to ensure that this mid-transition is smooth,\u201d CEC vice chair Siva Gunda told Associated Press<\/a>, insisting the freeze is not a walk-back on the state\u2019s efforts to shift from gasoline-powered cars and trucks to electric vehicles.<\/p>\n The energy commission said it will still require California refiners to keep a minimum level of fuel on hand to avoid shortages when refineries go offline for maintenance.<\/p>\n In the wake of the Phillips 66 and Valero announcements, Newsom earlier this year called on the CEC and other state agencies<\/a> to \u201credouble the state\u2019s efforts to work closely with refiners\u201d to help ensure Californians have access to transportation fuels such as gasoline in the short and long term.<\/p>\n