Gas prices' latest victim: Refineries
The BP West Coast Products LLC Carson oil refinery in Carson, Calif.
Stacey Vanek Smith: A Senate Committee is holding a hearing on gas prices today. Gas prices have been climbing in the U.S. -- $3.90 a gallon on average. One culprit for high costs? Global refineries shutting down.
From the Marketplace Sustainability Desk, Sarah Gardner reports.
Sarah Gardner: It may sound odd, but high oil prices are actually hurting some oil refiners, especially on the East Coast, says analyst Gene McGillian.
Gene McGillian: Two of them were shut and there's a third refinery that's possibly going to be shut this coming summer if Sunoco, who owns it, can't find a buyer for it.
Valero just idled a refinery in the Caribbean as well. The problem? Those refineries were processing high quality crude oil from the North Sea. Prices for so-called "Brent" crude have risen dramatically.
And with U.S. gasoline demand falling, industry consultant Andy Lipow says there was no way they could pass the higher prices along to consumers.
Andy Lipow: There not enough margin left for them to cover operating costs and make money.
Those refinery shutdowns have helped raise gas prices on the East Coast. Not all refiners are as squeezed, though. HollyFrontier, a Midwestern refiner that processes cheaper, heavier crudes from Canada, made a billion dollars last year.
I'm Sarah Gardner for Marketplace.