President Donald Trump has been pushing for more oil refining capacity in the United States as gasoline and diesel prices remain high. But building more refineries may not provide the quick relief many drivers are hoping for.
The main reason is that U.S. refineries are already operating close to their limits. The refining sector has been running at around 98% capacity, leaving relatively little spare capacity that can be used immediately to increase fuel production.
The Trump administration is considering ways to expand U.S. refining capacity, including the possible use of the Defense Production Act. Discussions with oil companies have focused not only on building new facilities but also on improving existing refineries and expanding their operations. No final decision has been made.
However, constructing a large new refinery is a long and expensive process. It requires major investment, environmental reviews, permits, equipment and years of construction. That means even if the government supports new projects today, they would not add significant fuel supplies to the market in the short term.
There is also another important problem: the current increase in gasoline prices is not simply caused by a lack of U.S. refineries.
Global oil markets have been heavily affected by the ongoing conflict involving Iran and disruptions around important shipping routes. Oil prices recently moved above $100 a barrel, while concerns about supplies through the Strait of Hormuz have added pressure to global energy markets.
The price of crude oil is one of the biggest factors affecting what Americans pay at the pump. More refining capacity could help increase the supply of gasoline and other fuels over time, but it cannot immediately solve a shortage of crude oil or problems affecting international transportation.
U.S. fuel prices have already climbed sharply this year. The national average for regular gasoline reached about $4.22 per gallon in early September, while diesel prices also reached record levels. Diesel is especially important because trucks, ships and other forms of transportation rely heavily on it. Higher diesel costs can eventually increase the prices of food and other goods.
There is still a potential long-term benefit to expanding refining capacity. Additional capacity could give the United States more flexibility during future supply disruptions and reduce some of the pressure created when refineries unexpectedly shut down.
But increasing refinery capacity is unlikely to be a quick solution for today’s high gas prices. Even existing plants are operating at very high levels, and global oil supply problems remain a major factor.
For drivers, the biggest relief may ultimately depend on what happens to global crude oil supplies and the conflicts disrupting energy markets. Until those pressures ease, simply adding more U.S. refining capacity may not be enough to bring gasoline prices down quickly.
