The chief economist at gasoline distributor Tesoro argues that a shortage of refining capacity is the culprit for consumers' painYou have to give Lynn Westfall credit. Not only is the chief economist for Tesoro (TSO) willing to talk to reporters as gasoline prices shoot up to a record of more than $3.20 a gallon, he even stopped by BusinessWeek's Los Angeles offices recently to discuss why prices are so high with Senior Correspondent Christopher Palmeri.
Westfall doesn't paint a pretty picture for motorists as Americans begin the peak summer driving season. Prices are likely to stay high for the foreseeable future, he says, hitting consumers in their pocketbooks. The Government Accountability Office (GAO) says that consumers already have spent $20 billion more on gasoline this year than last.
Tesoro and Westfall have emerged as more prominent players in the energy industry. The once sleepy, San Antonio-based company has in the past 10 years become a major force in gasoline distribution. Tesoro snapped up a half-dozen refineries, most recently the $1.8 billion purchase of a Los Angeles plant, and 278 gas stations from Royal Dutch Shell (RDS). Last year, Tesoro earned $800 million on sales of $18 billion. In just five years, its stock has shot up from $2 a share to $120, a performance that recalls of dot-com back in the day.
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