By Nicole Jao

NEW YORK, April 24 (Reuters) - Valero Energy VLO.N on Thursday said it would cease operations at its 170,000-barrel-per-day San Francisco-area oil refinery next year amid worries about California's declining fuel supplies and high gasoline prices.

The decision clarifies plans for the Benicia refinery after the San Antonio, Texas-based refiner last week announced its intent to "idle, restructure, or cease operations" there by the end of April 2026. Valero also said it had recorded a $1.1 billion pre-tax impairment related to its California refineries.

Valero CEO Lane Riggs cited challenging regulatory and enforcement environment for the decision to cease operations.

Benicia's closure is the latest in a series of planned refinery shutdowns in the state. In October, Phillips 66 PSX.N said it would shutter its Los Angeles-area refinery by the end of this year. Phillips 66 last year converted its Rodeo refinery into a renewables production facility.

Gasoline prices in California are among the highest in the country due to the state's reliance on imports to offset declining supplies.

California Governor Gavin Newsom this week told state officials to step up efforts to guarantee reliable fuel supplies for the state.

"California has been pursuing policies to move away from fossil fuels for the past 20 years, and the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America," Riggs said on Thursday during a call with analysts.

The Benicia refinery costs considerably more to maintain compared to Valero's 135,000-bpd Wilmington refinery near Los Angeles, Riggs added.

The Benicia refinery accounts for about 9% of the state's crude oil refining capacity. The facility processes feedstocks into products including gasoline, diesel, jet fuel and asphalt.

"Our current intent is to close the refinery," Rich Walsh, executive vice president at Valero, said during a call with analysts. "We've already had meetings with the CEC (California Energy Commission) and are working with them to minimize the impacts that would result from the loss of the refinery."

(Reporting by Nicole Jao in New YorkEditing by Marguerita Choy)

((Nicole.Jao@thomsonreuters.com; Twitter/X: @ByNicoleJao; +1 646 540 2216;))