Jul 16 2013
Despite Boom in Domestic Supply, Consumers Stuck with High Prices at the Pump
Washington, D.C. – Senate Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., pressed witnesses, including the CEO of the largest U.S. refiner, to explain why consumers have failed to benefit from a massive boom in oil production in recent years.
“Our people want to know why the flood of new domestic crude oil isn’t lowering prices at the pump,” Wyden said. “There is no question that the lower oil costs are not getting through to Americans’ wallets.”
Wyden noted that low oil prices in certain parts of the country have allowed refineries in the Midwest and Rockies to benefit from margins that are roughly double that of refiners on the East and West coasts. Despite the discounted oil costs, however, consumers have not seen relief at the pump.
“Why aren’t consumers seeing the benefits of those lower crude oil prices when two-thirds of the cost of a gallon of gasoline is the cost of the oil used to make it?” he asked witnesses at the hearing today.
Wyden and other committee members asked the administration for a real-time reporting system to make markets more transparent and prevent gasoline price spikes during planned and unplanned refinery outages, building on a letter Wyden and Senator Al Franken, D-Minn., sent to the administration in May.
To help oil companies avoid shutting down multiple refineries in the same region at the same time, Congress required the Energy Department to report on the impact of planned refinery shutdowns in the 2007 Energy Independence and Security Act. The Energy Information Administration, DOE’s statistical branch, stopped publishing the reports and collecting data from refineries in 2011.
Wyden also expressed his ongoing concerns about the impact of exporting domestically produced and refined oil to other countries, such as Venezuela. U.S.-based refiners exported an average of 2.6 million barrels per day of finished petroleum products, mostly made up of gasoline and diesel fuel. Americans consumed about 16.2 million barrels of finished petroleum products a day in 2012, according to the EIA.