Gas prices are on a mysterious climb
By Steven Mufson
Published: February 19
The average price of a gallon of regular gasoline has jumped 45 cents in the past 31 days, according to AAA, the fastest run-up since 2005.
Retail gasoline prices have climbed for 33 days in a row. A month ago, a gallon of regular gasoline cost $3.30; on Tuesday it stood at $3.75 nationwide.
The prices in the District are among the highest in the country, outstripped only by New York, Connecticut, California and Hawaii.
But some analysts also pointed to refinery issues. Several refineries have been shut down for routine maintenance, and in the eastern United States, several refineries simply went out of business in the past year.
“Atlantic Basin capacity closures have improved refining fundamentals,” the nation’s biggest refiner, Valero, said in a slide presentation at a Credit Suisse conference this month. It estimated that nearly 1 million barrels a day of refinery capacity has been closed on the East Coast or in the U.S. Virgin Islands in the past two years, which Valero said allowed it to increase profit margins.
If you read to the last two paragraphs of this article, there is no mystery at all. Government makes building new refineries economically impossible. Government makes increasing capacity of existing refineries difficult or economically impossible. Government prevention of replacement and upgraded facilities forces the use of aging and worn (= high maintenance and high failure rate!) equipment. Government mandates seasonally changed “boutique” (different from region to region and/or state to state) gasoline blends. Government regulations force some refineries out of business. What two things do all these factors have in common? 1.) Arbitrary government interference. 2.) Supply of gasoline is artificially (= governmentally!) decreased, resulting in increased prices. It’s Econ 101, but the WashPost has to hide it in the last two paragraphs of the article, withhold facts therefrom, and spin what it admits to blame refiners.
Welcome, East Coasters, to CA’s gas price reality of the past decade or two!