We now have more refining capacity than we use. The many years of upgrading and expanding existing refineries, combined with our falling demand, has left us with an excess of refining capacity. We are now a net exporter of refined products (diesel, jet fuel, etc) because we make more than we use.
We still import ~9 million barrels per day of crude oil. The cost of the crude oil is the reason gasoline, diesel, etc is so high.
I don't think crude has gone up that much; its that our Dollar is so damn weak that we are "paying" more.
Declining value of the dollar and the increase of oil prices account for 15% of the rise. The remainder comes from the various cocktails that has become gasoline due to over regulation as well as increases in taxes.
This looks to be a regional supply problem specific to the Northeast. Evidently east coast refineries are being squeezed due to price of input oil.
They can’t get product from the middle of the country and are not set up to process the lower quality crude anyway.
Article-
http://www.foxnews.com/politics/2012/03/17/as-gas-prices-rise-no-relief-in-sight-at-pump/
We are also a net exporter because refiners don’t want to keep dancing to the EPA’s boutique gasoline stupidity and instead refine fuels to the standards of, and for sale into, other markets outside the US.
Which makes more production sense - making a run of 1 million barrels formulated to one standard (for sale outside the US) or 20 lots of 50,000 barrels, each lot being slightly different but which can only be sold in a specific market, and of which each time you change formulas for a specific lot you have to shut down at least partially, thus greatly slowing your production and increasing your cost?
One of the workers at the BP refinery in Texas City told me that if BP can’t sell it, I think this year, they’re shutting it down.