Chevron Refinery Strike Could Eventually Mean Higher Gas Prices for Some

A strike that began Monday at a Chevron Corporation refinery near California's San Francisco Bay could potentially cause an additional rise in the state's gas prices.

Operations at the refinery will continue despite the strike by more than 500 workers, and the company said that it doesn't expect the move to result in any supply chain snags, the Associated Press reported. But if the worker walkout does ultimately cause the refinery to halt operations, it could have a negative impact on California gas prices.

The strike threatens to further worsen a trend of surging gas prices caused by rising inflation and Russia's attack on Ukraine late last month. The Biden administration has been facing backlash for the increase in prices, and U.S. officials are weighing ways to mitigate the pain at the pump for Americans.

The strike, organized by the United Steelworkers (USW) union, came after members voted against the latest contract proposal offered by Chevron, the AP reported. It began at 12:01 a.m., local time.

Chevron Strike Gas Prices
More than 500 workers at a Chevron Corp. refinery near San Francisco Bay have told the company they will go on strike on Monday, March 21. Above, a tanker truck passes a Chevron oil refinery in Richmond, California, on March 9, 2010. Paul Sakuma/AP Photo

If California gas prices were to see an additional rise, the increase would tack onto prices that were already the highest in the U.S. As of Monday, the average price for regular in the U.S. was $4.25 per gallon, while the average price in California was $5.86 per gallon, according to the American Automobile Association.

It was not immediately clear when Chevron and the workers may be able to find common ground on the contract.

Chevron said in a statement to Newsweek that it believes its contract offer was "fair, competitive and responsive" to the union's concerns.

"We have negotiated in good faith for months, reaching two tentative agreements that were rejected by the union, and we are ready to continue discussions with USW so we can reach an equitable agreement," the statement read. "However, the union's demands exceeded what the company believes to be reasonable and moved beyond what was agreed to as part of the national pattern bargaining agreement."

The statement added that Chevon is "fully prepared to continue normal operations" and anticipates "no issues in maintaining a reliable supply of products to the market."

A spokesperson for USW Local 5, whose members voted down Chevron's proposal, told Newsweek that the union's only interest is "getting a fair and equitable contract."

"For 70 days we've bargained, and the company was unwilling to really move on key issues," the spokesperson said, adding that Chevron "totally disregarded" safety concerns, and members overwhelmingly decided to vote down the contract they were offered.

"It's a reflection on the relationship that big oil has with oil workers. It's just years and years of losing and give backs and taking risks with our health and safety, the erosion of our health care programs and our standard of living," the spokesperson said. "Our workers were just tired of it."

Update 3/21/22, 12:50 p.m. ET: This story was updated with additional information and background.