Overview
- A 2023 law empowered the California Energy Commission to cap refinery profit margins and penalize price gouging, but the commission voted last August to delay the rules for five years to 2029.
- Statewide prices have climbed to about $5.30 a gallon as the Iran war lifts crude costs, with California’s isolated fuel market and shrinking refinery fleet intensifying the impact at the pump.
- Valero’s Benicia refinery, supplying roughly a tenth of the state’s fuel, is slated to close next month after Phillips 66 shut its Los Angeles facility last year, which industry representatives say contributes to a roughly 17% capacity loss.
- Consumer advocates urge the commission to rescind the delay and move quickly on profit caps and tighter fuel inventory requirements; regulators retain the authority to bring the rules forward sooner.
- Energy economists warn that strict profit caps risk shortages and gas lines, while policymakers explore options such as converting closing refineries to import terminals and evaluating a proposed pipeline from the Midwest; some analysts caution that a prolonged Strait of Hormuz disruption could push some station prices toward $10.