California’s petroleum industry regulators are anticipating that the state’s shrinking oil refining capacity could spur more competition in the gasoline market, potentially reducing the likelihood of price spikes at the pump.
What happened: Top state energy officials said Tuesday during a meeting of the Independent Consumer Fuels Advisory Committee that increasing imports of gasoline to California this year are beginning to transform the market dynamics in the state.
“It may be oversimplification, but that change from episodic imports after price spikes to steady-state imports seems to have resulted, at least in part, in more price stability in California,” Tai Milder, director of the state’s Division of Petroleum Market Oversight, said during the meeting.
Why it matters: Fears that the closure of two of California’s oil refineries would cause sharp price increases spurred state leaders to adopt major refinery and drilling industry-friendly reforms this year. If gasoline imports are able to stabilize prices, that could reshape the conversation around the state’s transportation fuels policy.
