The oil company said that the closure, scheduled for the end of next year, was not a direct response to the new law, but it added to a lack of refining that has pushed up gas prices in the Golden State.

“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” Mark Lashier, chairman and CEO of Phillips 66 said in a statement Wednesday. 

“Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands,” he added. 

The company plans to shut down its operations in the fourth quarter of 2025. The Los Angeles oil refinery has about 600 employees and 300 contractors. 

On Monday, Newsom signed into law a bill requiring that oil refineries in the state maintain a minimum amount of fuel to avoid supply shortages. California lawmakers have linked supply shortages to gasoline price hikes.

Specifically, the law would authorize the California Energy Commission (CEC) to oversee refineries in the state and ensure they uphold a minimum amount of fuel, feedstocks, and blending components. The commission would also require refiners to have a resupply plan for future maintenance outages. 

Big oil has been “raking in unprecedented profits because they can,” Newsom said Monday at a press conference. “Big oil does not have your back, period full stop.” 

However, a company spokesperson told the Washington Examiner via email that the decision was not related to Newsom’s recent bill but rather its based on several factors such as the future for the site. In the press release, Phillips 66 noted that it has engaged with two real estate development firms to evaluate its 650-acre sites in Wilmington and Carson, California.

Generally, California has much higher gas prices than the rest of the country, a phenomenon that has been linked to oil refineries going offline.

Philip 66, in a press release, said the state has indicated that expanding oil supply capabilities would be critical, adding it would work with the state to maintain current gasoline levels and meet consumer demands. The company added it would look to supply gasoline from outside its refinery network and obtain renewable diesel and sustainable aviation fuels from its Rodeo Renewable Energy Complex in San Francisco.