As many of you may be aware, the FTC has opened an official investigation into whether there's any manipulation or anti-competitive practices going on in the industry.
Recently, refiners have been coming under fire, and rightfully so, as lawmakers finally realize that perhaps the wildcard between crude oil and gasoline may be deliberately boosting profit. It does not come as a shock that the National Petrochemical & Refiners Association blasted the FTC for such an investigation, insisting that its members are not to blame.
Let's be realistic here people, refineries are the sole middleman that lies between raw crude oil and finished gasoline, diesel, etc. If prices go up there's a good chance it is because of something happening at the refinery level.
To the NPRA who insists that their members, refineries, aren't to blame? Where was the NPRA in May when refineries throughout Illinois and Indiana were plagued with suspect outages? Was it not the fault of refinery problems that prices soared in the region? Why were prices in Michigan, Indiana, Illinois, and other states in that area the highest in the nation? It was simple: refinery outages and problems (or whatever the truth is) caused prices to rise. And that, NPRA- was the direct impact of your members.
While rising crude prices certainly plays in to gasoline prices, why do you think retail gas prices climb so significantly almost every spring? Much of it, in my opinion, is what I call the "refinery wildcard". If there aren't refineries in operation, oil inventories increase and oil prices fall while gasoline inventories plummet and gas prices soar. Refineries have a major impact on pump prices whether they admit it or not.
As I've long insisted, since refineries have a conflict of interest in seeing higher prices, the government should at least have a pair of eyes and ears on the refining sector. Would it hurt? No. But it certainly could help ease the pain we see every spring and perhaps then could the government keep corrupt people honest.