The California Gas Crisis: A Ripple Effect that Will Hit Every New Yorker

It began with a quiet closure, 3,000 miles away from New York City, in the heart of Los Angeles, where the Phillips 66 refinery shut down.

139,000 barrels of gasoline a day were gone, and in that moment, it felt like just another business decision.

For those in New York, who had long grown accustomed to the ebb and flow of the oil market, it seemed like California’s problem.

But what happened next would send shockwaves through the city’s residents—turning a faraway decision into a crisis that would soon make life more expensive for every New Yorker.

Most people in the city were unaware of the fragile web that connected them to California’s refineries.

They didn’t realize that New York City doesn’t produce its own gasoline.

In fact, it hasn’t had a working refinery for decades.

New York is the fourth-largest consumer of gasoline in the U.S, but every single drop of fuel that powers its taxis, delivery trucks, Ubers, and commuters comes from somewhere else—somewhere already struggling.

The Colonial Pipeline, a 5,500-mile pipeline stretching from Houston, Texas, to the Port of New York and New Jersey, delivers nearly 45% of all fuel consumed on the East Coast.

Every time you fill up your tank in Manhattan, Brooklyn, or Queens, nearly half of that gasoline passed through this single pipeline.

It’s the lifeline that connects Gulf Coast refineries to over 50 million people across 14 states.

But as the Colonial Pipeline runs at maximum capacity nearly every day, it faces an increasing challenge: the rising demand for gasoline across the country.

And then, California, in its pursuit of cheap gas and a way out of its refinery crisis, decided to compete for those same reserves.

The state’s loss of 20% of its refining capacity due to the shutdown of the Phillips 66 refinery was only the beginning.

California, already struggling with importing fuel, now found itself fighting on the global market for oil from South Korea, India, and other Asian exporters.

This was no longer just about California; it was about every other state that relied on the Colonial Pipeline for its gasoline.

And New York was one of those states.

As California’s fuel supply tightened, it turned to the global market, competing directly with New York for the same tankers, the same fuel.

Ships loaded with gasoline, traveling across the Pacific Ocean, were heading for California instead of New York Harbor, the main fuel hub for the Northeast.

Every tank that filled California’s needs was one tank less for New York.

Experts were already noting the rise in gasoline imports by 15% as East Coast refineries struggled to meet demand.

California’s entry into the competition for gasoline was squeezing the supply lines for New York—and in the end, it was the East Coast that would pay the price.

The disruption didn’t just remain in the realm of theory; it was real, tangible, and very costly.

Back in May 2021, a mere 6-day shutdown of the Colonial Pipeline caused utter chaos across the East Coast.

Gas stations ran dry, people panicked, and the New York Attorney General had to issue warnings against price gouging.

It wasn’t just an inconvenience; it was a panic-induced frenzy.

People filled up gas cans, started hoarding, and the prices jumped in mere hours.

12,000 gas stations across the East Coast were impacted, and the chaos stretched on well after the pipeline resumed operations.

Now, imagine what would happen when California‘s refineries continued to decrease output, and New York faced the competition for tankers across the globe.

The supply chain was already stretched thin, and the demand was rising.

And there was no immediate fix.

The Colonial Pipeline had already been running at full capacity.

It couldn’t expand overnight.

More fuel had to come from overseas, but California’s competition for that very supply meant that New York could be left without enough fuel.

California’s willingness to pay premium prices for Asian gasoline meant that New York’s usual tankers could be rerouted to the West Coast.

Money talks, and California was speaking louder.

The price hikes didn’t take long to materialize.

By the end of 2024, Uber confirmed that gasoline prices would rise 25% in New York, thanks to the growing competition for fuel.

The prices for a $30 ride to the airport suddenly spiked to $55, making it clear: California’s crisis wasn’t just California’s problem anymore.

Every New Yorker, every business, every commuter felt the repercussions of this crisis.

The cost of doing business in New York skyrocketed, and it all began with a simple closure in Los Angeles.

The ripple effect had become a wave.

The tanker ships headed for California didn’t just carry fuel; they carried a future of rising prices and shifting market dynamics.

As fuel suppliers rushed to meet the demand from the West Coast, New York’s energy prices soared.

What many didn’t realize was that California’s fuel crisis wasn’t just about fuel.

It was about how global competition impacts local markets.

California’s loss of refining capacity now impacted New York, Pennsylvania, New Jersey, and every other state on the East Coast, as the Colonial Pipeline struggled to keep up.

On top of this, New York’s fuel system was already fragile.

The city had no refineries of its own and depended almost entirely on the Colonial Pipeline and imported gasoline.

As the gap between local production and global supply narrowed, the system grew weaker.

Fuel shortages weren’t just a possibility; they were an inevitable reality if things continued on this path.

When the California market started sucking up the fuel supplies, New York was left to fight for scraps—only the scraps were getting smaller.

This wasn’t just a story about fuel.

It was about a state that had become increasingly out of touch with the needs of its residents.

It wasn’t just about prices; it was about the cost of ignoring the future.

As California’s decision to import gasoline raised global prices, New York residents were forced to pay the price.

From food delivery to freight trucks to personal vehicles, everything became more expensive.

And in the end, it wasn’t just the price of gasoline that would hurt—it was the entire economy.

New Yorkers were bearing the brunt of California’s fuel decisions, all while the rest of the nation moved on, unable to understand the ripple effect from one coast to another.

The California crisis wasn’t just about a shortage of fuel.

It was a warning to New York about its fragile infrastructure, its dependence on the Colonial Pipeline, and its lack of local refining capacity.

As the city faces its future, it must now reckon with the costs of a disconnected system, where the choices made in one state can send shockwaves across the entire country.

And as California continues to navigate its fuel crisis, New York will continue to feel the pain.

This is the harsh reality of a world where supply chains don’t stop at state borders, and global competition determines who gets what.

New Yorkers are waking up to a new future, one where price hikes, energy instability, and supply disruptions are just the beginning.

The state’s failure to plan for these growing problems means that the cost of doing business—and living—will continue to rise.

All because a refinery shut down 3,000 miles away.