Diesel prices surge upward, marking a reversal following a consecutive five-week drop.

California officials are expressing concerns about the potential impact of refinery closures on fuel prices, as the state's energy landscape undergoes significant changes.

The latest development comes from Phillips 66, which announced plans to shut down its refinery complex in the Los Angeles area by the end of the year, with shutdown operations expected to begin soon. This news follows the closure of a refinery by Valero in the San Francisco bay area.

The closure of these refineries could tighten the supply of fuel in California, potentially driving up prices. Officials, however, are adamant about not driving any other refineries out of the state.

The spread between the national diesel price and the California price is currently $1.18/gallon, with the national price being less than the California price. This spread, which represents the difference in price between the two regions, has been on the rise. This week, the spread is more than it was a year ago ($1.124/g), but less than two years ago ($1.309/g).

The highest price during the 10 weeks following the June 23 price was $3.812/gallon, achieved on July 21. The lowest price was last week, at $3.708/gallon. However, the new price, effective from Monday but published on Wednesday, stands at $3.734/gallon, marking a slight increase. This is the highest spread since June 16, but below the highest spread this year ($1.321/g on May 26).

The rise in diesel prices has been steady since a significant jump on June 23, 2025. Since then, the DOE/EIA retail diesel price has remained within a narrow range, with no increase recorded since a 5.4 cts/g increase on July 21, 2025, until the recent rise.

Meanwhile, the world's crude benchmark, Brent, opened September by rising to a settlement at $69.14/barrel, but then reversed on Wednesday. No new information about Brent or the OPEC+ meeting was provided in this paragraph.

In a move to mitigate the potential impact of refinery closures on prices, regulators have put on hold a plan to place a cap on refining profits in the state. This decision could provide some relief to fuel consumers in California, as they navigate the rising prices and the uncertainty brought about by the refinery closures.

Diesel prices surge upward, marking a reversal following a consecutive five-week drop.