Arizona Faces Rising Gas Prices Amid Refinery Closures

Categories: Arizona Business NewsArizona State News

Gas prices continue to rise in Arizona, affected by refinery closures in California.

News Summary

Arizona Governor Katie Hobbs is addressing soaring gas prices in the state following the Benicia refinery fire in California, which disrupted fuel supplies. Gas prices in metro Phoenix have risen by 20 cents recently and are now averaging $3.52 per gallon. As California refineries close due to rising costs and regulations, the state remains heavily dependent on imported fuel. Experts predict continued upward pressure on prices as seasonal demand increases, with the metro area particularly vulnerable to fluctuations in supply chains.

Arizona Governor Katie Hobbs is taking steps to address the increasing gas prices in the state, following the closure of a California refinery that has disturbed fuel supplies across the region. The Benicia refinery in California experienced a fire last week, which has directly impacted gas availability for Western states, including Arizona, that rely on California for fuel provisions.

Recent reports from AAA Arizona indicate that gas prices in the metro Phoenix area have surged by approximately 20 cents within the past week. This upward trend builds upon a substantial increase of 59 cents over the last month, further contributing to a current average price of $3.52 per gallon in Phoenix. Despite these increases, prices remain lower than last year when they peaked over $4 per gallon.

In April 2026, Valero Energy Corporation plans to close the Benicia refinery due to escalating operational costs and stringent environmental regulations in California. In addition, another refinery in Los Angeles is scheduled to shut down later this year, which will collectively eliminate 309,000 barrels per day of refining capacity, as reported by GasBuddy analyst Patrick De Haan. These closures significantly threaten supply chains in states like Arizona that depend on imports for their fuel.

Governor Hobbs has expressed her administration’s commitment to working closely with California’s governor to navigate this crisis. Since Arizona lacks its own refineries, it is particularly vulnerable to fluctuations and disruptions in the fuel market. The state primarily sources fuel from California, making it susceptible to changes in that region.

The impact of California’s refineries extends beyond Arizona, with neighboring states in the Southwestern U.S. also facing increased gas prices due to the diminished supply. AAA Arizona emphasizes that without the necessary infrastructure upgrades in fuel delivery systems, the metro Phoenix area is reliant on a constrained pipeline network that hasn’t expanded in decades. This limitation exacerbates the situation when a major refinery ultimately shuts down.

The seasonal demand for gas further complicates the price dynamics. As spring approaches, factors like spring training events and the preparations for summer road trips lead to increased fuel consumption, which typically drives prices up. Additionally, Arizona is transitioning to summer fuel blends that are more costly to produce, contributing to the recent price surge. The average gas price in Arizona stood at $3.32 per gallon at the beginning of February, marking an increase of 28 cents from January.

While current gas prices are on the rise, it is worth noting that the average price remains below levels observed a year prior, thanks to favorable oil prices and proactive measures implemented by regulatory bodies. Areas closer to fuel sources, like Yuma, benefit from reduced transportation costs, allowing for comparatively cheaper gas prices.

In Phoenix, the recent increase of 14 cents within the last week reflects a broader trend of rising prices as the region adjusts to changing market conditions. Experts also predict sustained upward pressure on gas prices over the coming month, potentially easing as Memorial Day approaches, provided other market factors remain stable. This ongoing situation highlights the sensitivity of fuel prices to both local and regional disruptions in production and distribution.