Despite producing more oil than we have in decades, prices at the pump aren’t budging. The culprit? We’ve been increasing the amount of our gasoline that is being exported. While this is great for the profit margins of refiners, it’s not so wonderful for our wallets.
We’ve actually been a net exporter of gasoline since 2009. Overall, our exports of finished gasoline products have grown at a compound annual growth rate of 15.7% since 2000. However, as we’ve used less gas domestically over the last few years, our export growth has shifted into high gear and since 2010 that annual growth rate has jumped to 35.4%.
To put some numbers behind this trend, this past January we exported 16.981 million barrels of finished gasoline products. When you compare this to the 6.841 million barrels in January 2010, and the 3.936 million barrels in January 2000, you can see just how phenomenal our export growth has become.
One of the driving forces behind this export push is that gasoline demand has been dropping here in the U.S. We’re simply not driving as much as we used to, which is creating what appears to be a structural shift in our demand. However, this has quickly been displaced by increased demand for gasoline outside our borders. The market is simply selling gas to the highest bidder, which you will see is an unlikely buyer.
Traditionally, a bulk of our finished gasoline products had been shipped to Mexico. Since January 2000, 66.8% of all finished gasoline exports went just south of the border. However, Mexico has been pulling back lately and now represents only 32% of exports as of January 2013.
Picking up the slack is none other than Venezuela. The OPEC country had been a virtual non-entity in our export market until December 2011. This January it accounted for 20.6% of all exported finished gasoline product exports, which is up from 15.9% in December 2012. It’s also well above the 2% total it had been importing going back all the way to 2000.
Here’s why this could make your blood begin to boil. The Venezuelan government subsidizes its citizens’ gasoline so that that average price of gas is just $0.18 cents a gallon. I don’t know about you, but I no longer give much thought when gasoline prices fluctuate that much in one day. Worse yet, our government, on average, taxes us at twice that rate per gallon.
Those exports are one of the reasons why, as you can see by the map below, you’re still paying a pretty penny every time you fill up at the gas station.