Payam Javan: California lawmakers are weighing a controversial proposal to pay Valero up to $200 million in state funds to prevent the closure of its Benicia refinery, according to a Bloomberg report. The facility, slated to shut down by April 2026, has become central to discussions as the state faces mounting pressure over high fuel costs. Officials have reportedly considered earmarking the funds for routine maintenance—one of the largest expenses in refinery operations.

With two major refineries already scheduled to close, the debate underscores growing concerns about California’s energy security and cost of living. Critics warn that gas prices could surpass $8 per gallon if supply shrinks further, a scenario that Republican lawmakers attribute to Governor Gavin Newsom’s regulatory policies. “It’s a direct result of this governor’s anti-business agenda and failed leadership,” said State Sen. Tony Strickland, who urged for pro-growth policies instead of what he called political “damage control.”

Industry experts have also flagged potential risks beyond consumer costs, pointing to logistical challenges and national security implications if multiple plants, including Valero and Phillips 66, exit the market. Without in-state capacity, California would need to rely heavily on imported fuel, further driving up costs. Meanwhile, AAA data shows the state already leads the nation in fuel prices, averaging $4.62 per gallon, with prices climbing steadily in recent weeks.