With the Biden administration’s current policies, GasBuddy doesn’t believe any new oil refineries will be built.
In a Sunday interview on ABC’s “This Week”, Transportation Secretary and former South Bend Mayor Pete Buttigieg said oil companies need to increase oil production to ease the pain of consumers at the gas pump.
“Buttigieg’s comments would be better served by finding out why we can’t increase refining capacity and what the Biden administration should do about it. We’ve seen refineries shut down in the last few years and part of that was because of COVID, but with the administration’s policies, the last thing I think would ever happen is that a refinery would be built. The Secretary can say whatever he pleases, but that doesn’t mean it’s reality,” said Patrick DeHaan, head of petroleum analysis for GasBuddy.
With gas prices continuing to be at an all-time high, DeHaan says the need for more refineries and refinery capacity has never been greater, but those don’t just get built overnight.
“A location is key. You have to be close to pipelines and infrastructure, but there has been no significant refinery built in about 50 years and I’m sure it’s not going to happen now. We’ve seen a couple of teapot refineries that are small. The fact of the matter is that his administration would probably block any new refinery that was being built. Also, the transition away from fossil fuels would bode poorly for any investment being made. I think it’s like sticking fingers in your eyes to say refineries aren’t stepping up. They are running close to full tilt,” said DeHaan.
Indiana has had the second-largest increase in gas prices nationwide during the past week, but DeHaan thinks there could be some short-term relief at the pump.
“We could see prices start inching down towards the weekend after they went to $5.25 on Monday. It’s kind of a consolation prize seeing prices go down when they’re already so high. Some of those low-price Costco stations, they may go up. If you can’t fill up at one of those, then it may be best to wait,” said DeHaan.
Indiana drivers currently pay two gas taxes: a 7% state sales tax and a tax directed to infrastructure projects. The road projects tax is set to increase by a penny to 33 cents per gallon in July. Hoosiers also pay a federal gas tax.
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