Breaking down the price of gas

Scott Tong Mar 15, 2012

Tess Vigeland: And just as in Roman times, politics remains bloodsport. Today President Barack Obama accused Republicans of “riding the political wave,” blaming him for high gas prices.

But whether the blame is deserved, there’s no getting around the political undertow of $4 gas. And that’s just an average number, because as we know there’s a huge disparity in prices across the country.

Marketplace’s Scott Tong of our Sustainability Desk is on the case. Question number one: Why the heck am I paying $4.85 a gallon on Arroyo Blvd. in Pasadena?

Scott Tong: And why am I paying $4.01, Tess, on Robert E. Lee Highway outside Washington? The real question though, is how come Mark Routt in Houston paid a quarter less than that the other day? He’s a consultant at KBC Advanced Technologies.

Mark Routt: It was something like $3.76. Houston has relatively low gasoline prices, because we have a lot of refining capacity where we produce the gasoline.

So part of the issue is location, they’re close to where the gas gets made.

Which is an issue out East. Three key refineries here are: shut down, shut down, and almost shut down.

Jamie Webster at PFC Energy says refiners know that long-term, the U.S. market is shrinking. We drive less, on more efficient cars.

Jamie Webster: Vehicle miles that Americans drive has actually been going down. There isn’t any expectation that is suddenly going to start rising again.

Without locally made gas, Easterners could get more from the Gulf.

Wrong. Because the pipelines are full, and as for tankers, Mark Routt says a law called the Jones Act requires ships to be U.S.-flagged if they sail from one American port to another.

Routt: There just aren’t that many of these ships around. It’s virtually impossible to be moving gasoline from Gulf Coast Houston to New York City.

So East Coast prices, Tess, could start to approach, well, yours on the left coast. And you can thank local gas taxes, and regulations, says Phil Flynn at PFG Best.

Phil Flynn: When you think green, you think California. They’re a leader whether it comes to refineries, whether it comes to drilling, when it comes to smog. California’s been a leader. And they pay for it. They do pay through the nose for it.

So this summer, Tess, road trip — you and I will meet up with my brother in Colorado Springs: $3.49 a gallon. Jerk.

In Washington, I’m Scott Tong for Marketplace.

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