WASHINGTON, April 19, 2006 - API today issued the following statement in response to requests by Sen. Charles Schumer, D-NY, and others, for investigations into the increase in the price of gasoline:
“Any charge that oil companies are intentionally driving up prices ignores the very obvious fact that refinery capacity has been lower because the industry is still in the process of recovering from the extensive damage caused by Hurricanes Katrina and Rita last summer. It is a fact that three refineries remain closed since the hurricanes. The combined capacity of those refineries is 804,000 barrels per day – or about 5 percent of U.S. refinery capacity, the same amount Senator Schumer mentions.
“It also fails to take into consideration that refiners are facing the complicated challenge posed by the repeal of the RFG oxygen mandate – which may result in having to add more ethanol to reformulated gasoline, making it more expensive to produce. And it ignores the fact that some refineries are undergoing routine maintenance – necessary for the safety of their plants, their employees and the surrounding communities – that had to be delayed because of the hurricanes.
“Finally, comparing today’s gasoline prices to those of 1998 is extremely misleading because such a comparison does not take into account the fact that in 1998 crude oil was selling for $15 a barrel (in 2006 inflation adjusted dollars). Today it is around $70.”
News media contact: Juan R. Palomo, 202-682-8283