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The reason gasoline prices go up is because of the “law of supply and demand.” The speculators in the commodities markets become nervous when they see refining problems or if OPEC slows production. The last refinery in the United States was built in 1976-77. To increase the supply of gasoline in the United States it would be beneficial to build one or two more refineries in the United States. The most immediate goal would be to increase the capacity of the current refineries. The most immediate concerns for building new refineries though are the environmental, regulatory, financial incentives, and community acceptance of you can (or can not) build it in my backyard. It is easy to see why companies are reluctant to build new refineries. Of course some oil companies will say we can still get by with what they now have. The good old supply and demand and the market economy drive the price of gasoline no matter how much raw oil lies beneath the surface of the earth. Have one refinery develop a major problem and the commodities markets for gasoline will drive the price of gasoline up. All of this will happen even though OPEC produces the same amount or more oil as the previous month. Go to a local discount store and checkout the cost of a quart of motor oil. Remember what a quart cost in January. As each week and month pass with the type of gasoline prices we have now, the whole economy will be affected. It will be easy for you and everyone to figure out.
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