I've no doubt that refining capacity is the critical factor when it comes to the price of gasoline.
However, a barrel of oil only contains 55 gallons, doesn't it?
This past springtime that was selling for about $55, or 1 dollar a gallon. It's now about $65.
Maybe they can make more than 55 gallons of gasoline from 55 gallons of oil, but that doesn't make sense to me. Therefore, counting the $65 cost of a barrel of oil and the costs of transport, refining, additives, advertising, marketing, etc., I'd have to admit that any gasoline price under $1.70 or so a gallon ouldn't even cover costs.
Your point is well taken. A large part of the reason for gasoline being as high as $3.00 per gallon is the price of oil. Typically, a barrel of crude oil makes about half a barrel of gasoline (this varies quite a bit depending on the type of crude oil and the refinery). You are right that it is impossible to produce more than a barrel of gasoline from a barrel of crude oil. A barrel (in the oil business) is 42 gallons, not 55.
Refiners do, however, make other products besides gasoline, including aviation fuel, diesel fuel, heating oil, and coke.
The cost of gasoline at the pump also depends on refinery processing and transportaion costs, as well as taxes.
One reason oil has gone up in the past couple of years is that China has been buying a lot of it for their own economy. This drives the price up internationally. It is supply and demand.
I am still waiting to hear a good explanation for the dramatic increase in gasoline prices in the last few weeks. It started before the hurricane hit.
AS someone has probably already pointed out, a barrel of oil is 42 U.S. gallons.