Diesel and gasoline companies are cutting back on production, a move that most likely will mean higher prices at the pump

, according to reports by the Los Angeles Times.

Consumers have cut back on the amount of gasoline they use as a result of the economic situation, and this has affected the balance sheets of many oil companies, the Times says.

This week, Chevron announced plans to slice about 2,000 positions this year as part of its cost reduction efforts. The company also said it will be reviewing refinery operations in Hawaii and Africa.

"Downstream market conditions are likely to be difficult for the next several years," said Mike Wirth, executive vice president, Global Downstream at Chevron. "We intend to further concentrate our downstream portfolio in North America and Asia-Pacific. These are markets in which we have our greatest competitive strength. We are also rapidly and aggressively lowering costs, reducing capital spending, improving efficiency and simplifying our organization."

Energy company Sunoco announced it has shuttered its Eagle Point refinery in New Jersey. The company also signed an agreement to sell its polypropylene business. In 2009, it sold its Tulsa, Okla., refinery as well as its Retail Home Heating Oil business.

"In 2010, we expect to see a full year's benefit of the lower cost structure from both the business improvement initiative and closure of the Eagle Point refinery," said Lynn Elsenhans, chairman and CEO. "We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and excess global supply. However, the company has responded to the market environment with several strategic actions to improve our competitive cost position and optimize our portfolio and operating performance."

Valero Energy Corporation closed down its refinery in Delaware City, Del., in November 2009, and the company is in negotiations to sell the plant to PBF Investments.

"We have worked very closely with Gov. Markell, who has been instrumental in furthering these negotiations," said Bill Klesse, Valero chairman and CEO.



According to the Times, these refinery cuts would mean less supplies and greater prices for fuel at the pump.