Op-Ed: 'Crack Spread' Is What's Really Driving Pain at Pump

You may want to stop cheering every time crude oil prices tick down. In a New York Times opinion piece, energy analyst Skip York argues that the real number to watch isn't crude, it's the "crack spread"—the gap between what refiners pay for oil and what they charge for gasoline, diesel, and jet fuel. That spread has ballooned: since last year, wholesale gas and diesel are up roughly 59% and 69%, compared with a 36% climb in crude. The familiar "rocket and feather" pattern is also back, York writes, with pump prices jumping quickly when crude rises but easing only slowly when it falls.

What's driving the squeeze, according to York, is refining capacity, not oil supply. War and attacks have sidelined plants in Russia and the Persian Gulf, taking about 9% of global refining capacity offline, while few new refineries are being built. China has added pressure by cutting crude imports but also limiting exports of fuel, tightening global supplies. The result: persistently high prices for gasoline, diesel, shipping, and air travel—and a tougher inflation fight. For York's full argument, read the piece at the New York Times.