We all hate to pay more for gasoline, but lest be a little realistic and lay blame where it is deserved.
Contrary to what has been alleged in this discussion, the big oil and gas companies don't set the prices based on what they want us to spend. They don't manufacture supply restrictions. And while they are trying to make money, they are not cheating us to do it.
The gas you get at most pumps comes from the same place and through the same pipeline. Where it gets differentiated into Shell, BP, Marathon, etc is after it is delivered to your area. Different dealers have a different batch of cleaners, stabilizers, and additives that go right before being placed in the trucks and taken to the stations. The price of gas, while dependent in part on the proce of oil is not based entirely on the price of oil. Other factors going into our pice at the pump include the current gas inventories at the wholesalers, current refining capacity that is online, and current (and projected) demand. There is a market where gasoline is traded just like any other commodity and that price combined with our local taxes and tarrifs is what determines what we pay.
Before looking at the supply issues, it is important to answer one interesting question. Who really makes money when you buy your gas? It is a true FACT that the biggest profit made on every gallon of gas sold goes to the government in taxes. Our politicians seem to respond to us when prices go up. They launch investigations of gouging, price fixing, intentional supply restrictions. But never to they put back the money that the government skims off of every gallon sold. And this ignores any corporate tax collected on their profits.
One of the points offered earlier is that 'is seems odd that all the refineries seem down for repair at the same time'. There are two things that cause this phenomenon. First, the refining process is optimized differently based on the season. In spring, the refineries have to be taken offline to change over to the summer optimization. This is necessary because in the summer months, the primary product consumers need from the oil is gasoline, while in the fall, they need to increase the amount of heating oil producted. This compounds with the other issue in the spring: The demand for Gasoline is on a steep rise as the summer driving (or as we call it, fishing) season kicks in.
So lets get to the issues causing our rising fuel costs. Firstly, while oil's cost is up some, oil shortages are not present. There is plenty of oil currently available and with vast reserves just being tapped in Canada, Russia, and a new one in the Gulf there is plenty for the foreseeable future. As long as we continue to pursue a viable alternative, there is enough oil to keep us going until that alternative is found. Since the availability of oil is not the issue, there is only one remaining thing to restrict our supply of gas... refining capacity.
The gasoline refineries are running at 97-98% capacities, year round just to keep up with our demand right now. That means that whenever there is any necessary down-time on any refinery, it has an immediate and meaningful impact on that supply which in turn drives our prices up. So why not biuld more refineries? There are two things that prevent the gasoline companies from building more capacity. The first is cost. It costs billions to get the necessary permits, inspections, materials, land, etc to build a refinery. These businesses must be profitable, so in order to justify spending those billions, they must be certain that they will make that money back. If we are going to succeed in finding our alternate energy source within 10 years, the new refining capacity would not pay for itself.
The second contributing factor to gas companies decision not to build more refining capacity contributes to the first. Our politicians refuse to make it viable for anyone to do anything about increasing the refining capacity (or producing more oil, for that matter). I'm not talking about the current administration, but our congress dating back to the Carter administration. It isn't a Republican/Democrat issue as no one on either side has done anything to promote the improving of our petroleum infrastructure. The largest part of the cost of building a refinery is the tax/tarrif/permit fees. All of those fees could be waived (or subsidized) if someone *really* wanted to do something about this issue.
Just to make the point crystal clear, there is a *huge* oil field in the Gulf of Mexico, just off the Florida coast. Our own environmentalist lobby has made oil exploration in this area illegal for US interests. so instead of an american company being able to drill and refine this oil, companies from other less environmentally conscious nations are taking it. Obviously our environmantalists in this country think they are preventing us from causing an ecological disaster. The problem is that the people that do get at this oil are far more likely to cause a spill than americans would, and we will be the ones having to clean it up.
CC
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