The increase in gasoline prices is not attributable to worldwide supply problems. Threats by Iran to close the Strait of Hormuz are partly responsible for the increased prices, but another culprit is our oil industry.
In 2011 U.S. refineries exported a record amount of refined fuels to foreign markets. In December 2011, fuel exports averaged 2.89 million barrels a day, compared to an average of 1.25 million barrels a day in 2007. Higher prices paid in foreign markets attracted U.S. exports.
Fuels exported overseas means less fuel in this country and higher gasoline prices. Our oil companies have put profits ahead of our economic health. It is estimated the five largest U.S. oil companies had profits of $120 billion in 2011.
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U.S. refineries closed some facilities or reduced production in 2011. We continue to be constrained by old refineries, which require major maintenance and, thereby, increase the cost of refined fuels. The last new refinery to come on line in the U.S. was in 1975.
We need the Obama administration to pressure U.S. oil companies to upgrade refineries and sell more refined fuels to U.S. markets to help lower our prices. When Obama became president, gasoline was $1.84 per gallon.
Donald A. Moskowitz