Gas prices unlikely to be affected by closure of Phillips 66 refinery in Wilmington area: Expert
WILINGTON, Calif. (KABC) -- The announcement that Phillips 66 will close its Wilmington and Carson refinery facility by the end of next year has prompted a slew of blame pointed at California's new law that aims to stabilize gas prices.
But one expert says the law, which requires refineries to store more gasoline to avoid price spikes during maintenance shutdowns, most likely played little to no role in the closure.
"You don't shut down a refinery based on two or three weeks of planning," said Severin Borenstein, the faculty director of the Energy Institute at U.C. Berkley's Haas School of Business. "This has been in the works for at least a year."
Borenstein says Phillips 66 already imports gasoline from other states and countries, and may see that business model as a better moneymaker.
"These refineries look to be very profitable, so I was surprised to see that they were planning to close it down," said Borenstein. "Its possible that Phillips 66 has decided it just makes more economic sense to bring that gasoline in than to produce it inside the state."
Borenstein says the Phillips refinery closure most likely will not affect everyday gas prices, but importing gasoline can take four to five weeks to get in the system. And Borenstein does say that delivery delay could increase prices during maintenance shutdowns and other shortages.
"If we have a price spike, they can't respond as quickly and so that certainly creates some concerns," he said.
Borenstein says that the demand for gasoline is starting to drop in California thanks to more fuel efficient vehicles and the growing popularity of electric cars and trucks.
An Eyewitness News data dive shows that 24.9% of all new cars sold in California in the second quarter this year were electric vehicles. In fact, California is responsible for 34% of all new EV sales in the U.S.
