NEW YORK, NY -- (Marketwire) -- 03/30/12 -- Refineries dip despite high gasoline prices. The national average price of a gallon of regular unleaded gas climbed to $3.898 on Tuesday. But the high prices still aren't enough to save some U.S. oil refiners, who are finding it a terrible time to be in the gasoline business. The Paragon Report examines the outlook for companies in the Oil & Gas Refining Industry and provides equity research on HollyFrontier Corp. (NYSE: HFC) and Marathon Petroleum Corp. (NYSE: MPC).
"Yet high crude costs are proving difficult to pass on to the consumers. That has made refining -- which once was considered a must-have business for many large energy companies -- unprofitable and unfashionable," Tom Fowler wrote in a recent article for the Wall Street Journal.
Gasoline demand in the U.S. has dropped drastically in past years. The major factors have been the 2008 recession, greater use of biofuels, and the growing fuel efficiency in U.S. vehicles. In December, Americans drove 264.4 billion miles, up 1.3% from the year before, but did so using 2.5% less gasoline and diesel, according to data from the U.S. Department of Transportation and the Energy Information Administration.
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HollyFrontier Corp. reported fourth quarter net income attributable to HollyFrontier stockholders of $223.4 million or $1.06 per diluted share for the quarter ended December 31, 2011, compared to $14.7 million or $0.13 per diluted share for the quarter ended December 31, 2010.
Marathon Petroleum Corp. reported a $75 million loss for the fourth quarter as higher oil prices increased costs at its refineries. The company's fourth-quarter loss amounted to 21 cents per share for the October-December period. That compares with a profit of $233 million, or 64 cents per share, in the same part of 2010. Revenue rose 11.3 percent to $19.4 billion.
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