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Addressing higher gasoline prices

Hydrocarbon Engineering,

In remarks to reporters on the morning of 22nd February, API’s Chief Economist John Felmy, said the nation must develop more of its own oil and natural gas and allow more oil imports from energy rich Canada to increase America’s energy security and help address higher gasoline prices:

‘By far, the single biggest factor in today’s higher gasoline prices is the rising cost of crude oil. It has driven virtually all the rise in gasoline process. Together, what refiners have to pay on the world market for crude plus gasoline taxes accounts for over US$ 3.00, or about 84%, of what people are paying at the pump today.’

‘Exports are not causing gasoline prices to rise. Less than 1/6 of product exports have been gasoline, and only a tiny amount of this was reformulated gasoline used in larger metropolitan areas.’

‘US refiners produce fuels primarily for American markets and always have. However, when supplies are available to export, as they are today because of weak US demand, they put downward pressure on the prices of the gasoline and other products we import. Exports also mean jobs for Americans, including good paying US refinery jobs, and a lower trade deficit.’

‘The administration understands that risking crude oil prices are driving higher gasoline process. We agree with that. But we don’t agree on solutions. The industry must be allowed to develop at home more of its ample crude oil and natural gas resources. More US barrels on crude markets would help drive down crude costs and reduce gasoline process. We need policies that ease access to US oil and natural gas resources, which are still very ample. We also need policies that add critical infrastructure, such as building the Keystone XL pipeline, to bring in more of Canada’s vast supplies of oil, and policies that keep regulations and tax policy reasonable. The administration has not stepped up to the plate on any of this.’

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