California officials are taking the rare step of seeking a buyer for Valero Energy’s Benicia refinery, slated to shut down by April 2026. The state’s intervention, led by the California Energy Commission (CEC), aims to secure the facility’s continued operation as fuel supply warnings escalate.
Built in 1968 and acquired by Valero in 2000, the Benicia refinery processes between 145,000 and 170,000 barrels per day—accounting for roughly 9% of California’s crude refining capacity and employing about 400 workers. The plant also supplies jet fuel to Travis Air Force Base, making it vital to national defense and the regional economy.
Valero’s decision to close the facility reflects mounting regulatory pressure and economic losses exceeding $1 billion in impairment charges tied to its California operations. The company previously halted negotiations with HF Sinclair over a potential sale, citing environmental concerns.
California’s push to find a new owner stands in stark contrast to its long-standing climate-first energy policy. State adoption of market players—including domestic firms like HF Sinclair and European operators experienced with strict emissions standards—is intended to keep the refinery online.
The potential impact on motorists looms large: with California gas prices already averaging $4.48 per gallon (well above the national average of $3.16), experts warn prices could surge to $6–$8 per gallon if the Benicia and Wilmington refineries close.
In Benicia, the refinery’s departure would deal a major blow to the local economy. As the city’s largest employer and tax contributor—supporting municipal services and infrastructure—the loss could trigger widespread fiscal instability.
