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Decision marks another blow to California's fuel supplies

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Company cites poor profits compared with its other plants

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California isolated from U.S. Gulf Coast and Midwest

refining

centers

(Adds two other oil refineries in California have closed since

2020, USW to bargain for severance)

By Juby Babu, Erwin Seba and Nicole Jao

Oct 16 (Reuters) - Phillips 66 said it will shut

its large Los Angeles-area oil refinery late next year,

delivering a blow to California's fuel supply amid complaints

about the state's high prices.

Phillips 66 CEO Mark Lashier cited "market dynamics" for

the decision. The Los Angeles facility provides lower profits

than other company oil processing plants, a spokesperson said.

California, the most populous U.S. state, consistently

experiences some of the nation's highest average gas prices,

leading to an often tense relationship between the state and oil

companies.

Phillips' exit will leave a hole in California's motor

fuel supply, which has seen two other refineries close since

2020, including one by Phillips.

The Phillips 66 Los Angeles refinery produces 85,000

barrels per day of gasoline and 65,000 barrels per day of diesel

and jet fuel.

The announcement came a day after California Governor

Gavin Newsom signed a bill requiring the state's oil refiners to

maintain minimum fuel inventories, and authorizing the state's

Energy Commission to ensure that refiners have a plan to prevent

shortages during maintenance outages.

California is geographically isolated from U.S. Gulf

Coast and Midwest refining centers, and must produce all its own

motor fuels or import them from Asia. Motorists this week are

paying about 46% more per gallon for gas than the national

retail average of $3.20, according to AAA.

Phillips earlier this year converted its Rodeo,

California, refinery to producing renewable diesel from fats,

vegetable oils and greases from making gasoline and diesel from

crude oil.

Marathon Petroleum in 2020 stopped producing fuels at a

refinery in Martinez, California, citing poor profits.

The Los Angeles facility employs about 600 Phillips 66

employees and 300 contractors.

Mike Smith, chair of the United Steelworkers oil

bargaining program, said the planned closing "is a devastating

loss for workers and the surrounding communities." The union

intends to bargain for severance pay and benefits for affected

workers.

Houston-based Phillips 66 is discussing with real estate

developers the future use of the refinery's 659 acres now

occupied by two facilities connected by a pipeline.