October 17, 2024 [Oil Price]- Refiner Phillips 66 said it would shut down a refinery in the vicinity of Los Angeles by the end of next year on what the AP called market concerns and Reuters cited the company’s chief executive as mentioning “market dynamics”.
The decision was announced just days after California’s governor, Gavin Newsom, signed into law a bill that would give state energy regulators to mandate certain fuel inventory levels for refiners and to approve scheduled maintenance at refineries.
“Price spikes at the pump are profit spikes for Big Oil,” Newsom said back in August when he proposed the bill. “Refiners should be required to plan ahead and backfill supplies to keep prices stable, instead of playing games to earn even more profits. By making refiners act responsibly and maintain a gas reserve, Californians would save money at the pump every year.”
The proposal follows findings by the California Energy Commission that for 63 days last year, refiners in the state maintained a gasoline inventory of just 15 days of consumption, which, according to the governor’s office, led to higher prices.
The Phillips 66 L.A.-area facility produces 85,000 barrels of gasoline and 65,000 barrels of diesel fuel daily, Reuters noted in its report. That would be 85,000 bpd of gasoline and 65,000 bpd of diesel fuel less for California drivers who have been struggling under the highest gas prices in the country.
For these prices, the governor and his government are blaming oil companies such as Phillips 66, accusing them of withholding supply in order to get higher prices for their products. The industry, for its part, has noted that California has the highest add-on costs in the form of excise duties and carbon tax.
The Phillips 66 refinery closure will result in the loss of 600 company jobs and 300 contractor jobs.
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