Arizona Governor Responds to Rising Gas Prices Following Refinery Closures

Categories: Breaking NewsEconomyGovernment NewsNews

Current gas prices displayed at a popular Phoenix gas station

News Summary

Arizona’s Governor Katie Hobbs is addressing the surge in gas prices due to the closure of a California refinery, which has already led to a significant increase in pricing across metro Phoenix. With discussions under way with California officials, state officials are managing the implications as prices spike, influenced by seasonal demand and refinery capacity reductions. The average gas price in Maricopa County has risen sharply, prompting concerns about further increases in the coming weeks.

Phoenix, Arizona – Arizona’s Governor Katie Hobbs is taking measures to combat rising gas prices linked to the closure of a California refinery following a recent fire. The disturbances in gas supply chains have already prompted a noticeable increase in prices across Arizona, with rates in metro Phoenix climbing approximately 20 cents per gallon since last week.

The Benicia refinery in California, operated by Valero, is set to cease operations in April 2026, a decision influenced by rising costs and strict environmental regulations in the state. This closure, coupled with another impending shutdown at a Los Angeles refinery later this year, is projected to lead to a significant reduction in refining capacity, amounting to a combined loss of 309,000 barrels per day as noted by gas analyst Patrick De Haan.

Governor Hobbs has confirmed that her administration is in discussions with the California governor regarding the implications of these refinery closures. Arizona is particularly vulnerable to fluctuations in gas prices as it relies heavily on imported fuel from California, which serves as the primary source for the Phoenix Valley and northern Arizona.

Immediate Effects on Gas Prices

According to AAA Arizona data, prices at the pump have surged significantly, with the average gas price in Maricopa County rising by 59 cents over the past month to an average of $3.53 per gallon as of the last report. The rising demand for fuel as the region transitions into the spring season—alongside the imminent switch to summer gasoline blends—has compounded the price increase. Typically, prices rise during this period as consumer demand escalates, amplified by seasonal travel and events like spring training.

With historical patterns showing that gas prices tend to escalate in the spring, the current trajectory suggests further increases may be on the horizon. Analysts, including De Haan, anticipate that consumers could face an additional rise of 30 to 40 cents per gallon within the coming weeks.

Factors Influencing the Spike

Several dynamics in the fuel market are contributing to higher gas prices in Arizona. The switch to summer gasoline, which is designed to minimize pollution, typically incurs an added cost of about 10 cents per gallon. The state’s pricing is influenced by its reliance on California’s refined gasoline, which is characterized by stricter supply chain and regulatory environments, leading to higher costs compared to the national average.

The growing demand for fuel, particularly during the spring season as tourism picks up, is coupled with a backdrop of refinery maintenance and other disruptions. The infrastructure for transporting fuel to metro Phoenix has remained stagnant for decades, further exacerbating the tight supply situation and driving costs upward.

Comparative State Gas Prices

While prices in Maricopa County are on the rise, they remain significantly lower compared to the previous year’s rates that exceeded $4 per gallon. In contrast, gas prices vary throughout Arizona, with Yuma presenting the cheapest options at about $3.12 per gallon due to its geographic proximity to California crude sources. Conversely, Scottsdale residents are observing the highest prices in the metro area, averaging around $3.69 per gallon. Eastern counties near New Mexico, like Graham County, are experiencing lower prices, with averages around $2.79 per gallon.

Conclusion

The recent refinery shutdowns in California pose a serious concern for Arizona gas prices, particularly as demand surges with the arrival of spring. With infrastructure limitations and the state’s dependence on external supply, the situation remains fluid, prompting ongoing communication between state leaders to manage the fallout effectively.