Fleet Management

Study: Refinery Closures Will Drive Fuel Prices Up

December 27, 2011

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A study released on Friday by the U.S. Energy Information Administration suggests gasoline prices could spike and ultra-low sulfur diesel supplies could be compromised by the potential closure of three Delaware Valley refineries.

Last month, a congressional contingent that included U.S. Reps. Patrick Meehan, R-7, of Upper Darby, Robert Brady, D-1, of Philadelphia and Chaka Fattah, D-2, of Philadelphia, and U.S. Sens. Robert Casey, D-Pa., and Patrick Toomey, R-Pa., sent a request to the U.S. Energy Information Administration asking for an independent assessment of the situation.

The EIA is the statistical and analytical agency within the U.S. Department of Energy and released an eight-page "Reductions in Northeast Refining Activity: Potential Implications for Petroleum Product Markets" Friday.

In September, Sunoco executives announced plans to sell the Marcus Hook and Philadelphia refineries, with the intention of closing the facilities if a new owner wasn't located.

In December, the company issued a 90-day layoff pronouncement for the Marcus Hook employees, and Philadelphia is slated to shutdown no later than July.

In addition, ConocoPhillips stopped producing gasoline and other petroleum products at its Trainer facility in September with a plant closure anticipated for the first months of the new year.

Refineries on the East Coast supply 40 percent of the Northeast's gasoline sales and 60 percent of diesel and other fuel oils.

Of that, half comes from the Marcus Hook, Trainer and Philadelphia refineries.

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