Why does gas get expensive? The answer comes easily when there is (an unusual level of) turmoil in
the Middle East, but what about the sudden, 45-cent spike we have observed over the past month that
doesn’t seem triggered by world events?

The National Geographic explains this recent painful fluctuation as an effect of the usually-ignored parts of the fossil fuel supply chain, namely, refineries. The government’s own Energy Information Administration, a statistics and analysis office, attributes most of the price increase to the dirty-sounding “crack spread,” an index of oil refinery profits (the term comes from “fluid catalytic cracking,” the thermochemical process by which refineries “crack” crude oil hydrocarbons into smaller molecules that can then be filtered and turned into gasoline and other oil-derived consumer products).

Everyone knows that oil companies make huge profits; many people don’t realize that refining crude oil
is a much more competitive business with a much smaller profit margin. While around 80% of the price
of gas is accounted for by the price of crude oil and taxes, the last 20% is thrown in by the rest of the
supply chain, which includes refineries, transporters, and vendors.

US-based refinery capacity has been unusually small of late, due to many facilities closing down for
scheduled maintenance. The EIA estimates that this has reduced refining capacity by around 9% this
winter.

Due to the fact that gasoline is relatively difficult and expensive to transport, regional refining capacity
is an important factor in determining the cost of gas in that area. Refinery shutdowns in a particular
region will require fuel to be trucked in from other parts of the country, and transportation costs will
automatically add several cents to the price of gas in that region.

Maintenance is only one of the issues that led to the current crunch. Industry sources point to the
lasting effects of Hurricane Sandy, as well as a focus shift by European refineries towards home heating
fuel, due to the unusually cold winter on that continent.

Any spike in gas prices has a disproportionate effect on industries that rely on driving and
transportation, which includes auto transport. This is one of the factors that contribute to a car owner’s
decision on car shipping vs driving cross-country. Each method of relocating your vehicle has its
advantages and drawbacks; the informational materials created by Direct Connect Auto Transport exist
to help you make that decision.