Here's Why People Are Blaming Refineries For Higher Gas Prices | KERA News

Here's Why People Are Blaming Refineries For Higher Gas Prices

Originally published on March 10, 2015 2:05 pm

You might have noticed gas prices inching up, but crude oil prices are still waaaay lower than they were a year ago – so what’s behind the jump in gasoline?  Usually, higher prices at the pump are linked to the higher cost of crude oil. But at this time of year, people blame refineries.  

"What we’re seeing is that strong relationship between gas and oil fade," says Patrick Dehane, an oil analyst with Gasbuddy.com. "It is… I wouldn’t say a nasty breakup. But the two are becoming more distant because of refining.” 

Refineries are the places where crude oil is turned into gasoline.  Right now there are two factors at play in refineries that are boosting the cost of gas. 

“Those factors being refinery maintenance. Which reduces the output of gasoline," says Dehane. "And we’re also switching over slowly to those more expensive required summer blends of gasoline that folks may hear about.” 

First, maintenance.  It's often done this time of year before the summer driving season starts.  Right now, demand for gas is lower, so refineries can afford to slow down production to do work.  Still, that drop in supply can drive up prices at the pump. 

“The analogy I use is you can’t change the oil on your car when it’s running. Neither can refineries do maintenance successfully while they're producing gasoline," says Dehane. 

The second factor is that summer gas “blend.”  That’s a mix of fuel and additives required during warmer months. Those additives help reduce gasoline evaporation at higher temperatures, so it’s better for the environment. Summer blend also gives you slightly higher gas mileage, but it's also more expensive. 

Dehane says the new blend and refinery work will keep prices on the rise for the next five weeks or so. After that, Dehane predicts, the cost of gas should stabilize to somewhere in the low two-dollar-a-gallon range on average.

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