Refiners Feeling the Pain.

"Oil Companies" has become a catch-all term for just about any corporate interest with an stake in the chain of custody that starts wtih drilling for oil and ends with pumping gas into a car. Thoroughly reviled, the slur "oil companies" is usually uttered with the kind of disgust ususally reserved by the media and others for words like "tax cuts" or "Cheney."

But the "oil companies" (at least the refiners, anyway) are starting to feel the sting of high cost of oil and gasoline, too. According to the New York times, gas prices have risen 39% in the last year, but the price of oil has doubled, so refining margins are way down-- like 60% down from a year ago.

The economics of the problem are fairly simple to grasp: the raw material refiners have to purchase-- oil-- has gotten really, really expensive, and the end product they sell-- gasoline-- has also gotten expensive, but not expensive enough to keep pace with the price of oil. And, to compound the problem, consumers are buying less gasoline because of other economic factors weighing on their spending habits.

According to the Times:

"Tesoro, Sunoco, and United Refining all posted losses in the first quarter. The hardest hit have been small refineries that tend to process the most expensive types of crude oil into gasoline. Sunoco, for example, lost $123 million in the first quarter, while Tesoro posted a $82 million loss for that period, in contrast to a profit of $116 million last year."

Valero, the largest independent refiner in the country, saw first quarter profit tumble 76%.

Oil Refiners See Profits Sink as Consumption Falls [New York Times]