Are Fuel Exports Driving Up the Price of Gas?
Yes, they probably are. But here’s why that’s OK.
The U.S. fossil fuel renaissance has sparked job booms in the oil fields of North Dakota and Texas, shrunk our national import tab, and led to a whole lot of talk about energy independence. But, as BloombergBusinessweek noted recently, one thing it hasn’t done is lower the price of gasoline for American motorists, who are still paying $3.71 a gallon.
Why not? There are a lot of ways to answer that question, the simplest being that despite all our drilling, oil is remains expensive. Worldwide, demand still beats supply. And since the cost of crude accounts for 72 percent of the cost of gasoline,* pump prices have stayed high.
But that doesn’t quite put the issue to bed. After all, Americans are driving and fueling up less, which should theoretically encourage the oil refiners that produce our gasoline and diesel to cut their prices. Businessweek points to a few reasons why that hasn’t happened, but I want to focus on just one of them: exports.
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