“We produce more oil at home than we have in 15 years,” President Barack Obama observed in his much-watched, much-covered State of the Union message. So U.S. drivers might wonder why the price demanded at their neighborhood gas station has soared by about 45 cents in recent weeks.
The usual reaction to such a rapid increase has been an irritated glance in the direction of foreign oil producers. This time, however, analysis reveals that the primary pumper-uppers of pump prices reside much closer to home. They are the nation’s oil refiners, the crucial middlemen who “crack” crude oil into gasoline, heating oil, and other derivative products.
A new analysis released by the Energy Information Administration, the U.S. government’s energy statistics and analysis agency, suggests that “about two-thirds of the rise in gasoline prices since the start of the year” can be traced to a rise in the “crack spread,” a measure of refinery profit margins. In comparison, only about 15 cents of the rise is due to worldwide increases in crude oil prices.