By Nicole Jao, David French and Shariq Khan
NEW YORK (Reuters) -California government officials are trying to find a buyer for Valero Energy’s Benicia refinery near San Francisco, three sources familiar with the matter said, an unusual effort as the clock ticks down on the company’s planned closure of the facility in April.
The rare attempt by a state government to broker the sale of privately-owned infrastructure reflects its growing concerns over protecting fuel supplies in the most populous U.S. state and keeping a lid on prices, where California’s nearly 28 million drivers already pay among the highest prices for gasoline in the country.
California’s effort to save the refinery from closing also marks a shift from the focus of government policy in recent years to champion green initiatives and restrict fossil fuel usage, that has led to an often tense relationship between the state and oil companies, including the second-largest U.S. refiner by capacity.
The state’s primary energy and policy planning agency, the California Energy Commission (CEC), has actively sought buyers for the plant, three sources told Reuters, speaking on condition of anonymity to discuss private deliberations.
The CEC declined to say whether it is engaged directly with buyers for the facility but acknowledged it is working to ensure the facility remains open.
“CEC is engaging with market players to explore pathways for the continued operation of in-state refineries,” the agency said in an emailed statement.
Valero, which reports earnings on Thursday, did not respond to comment requests.
Earlier this year, Valero announced its intention to cease operations by April 2026 at the 145,000-barrel-per-day San Francisco-area refinery amid worries about California’s declining fuel supplies and high gasoline prices.
The San Antonio, Texas-based refiner is also reviewing whether to continue operations at the rest of its refineries in California, including the 91,300-bpd Wilmington plant near Los Angeles.
This comes after Phillips 66 said last October it will shut its Los Angeles-area refinery due to “market dynamics” and begin in October winding down operations at the 139,000-bpd plant.
The two refineries, combined, produce roughly 17% of the state’s gasoline supply. Their shutting, alongside other closures and refineries converted to produce renewable fuels, like Phillips 66’s Rodeo facility last year, will leave California even more dependent on more expensive fuel imports that would further drive up prices.
