Former Shell Oil President John Hofmeister on Thursday said oil refineries in Texas are making a big comeback after Hurricane Harvey.
â€œI think the big Houston machine is gearing back up. I think only four refineries are currently not in a startup mode or at some progressive level along that way. So the big machine that feeds this nation is coming back, coming back quickly and I think thatâ€™s all to the good,â€ he told FOX Businessâ€™ Stuart Varney on Varney & Co.
The Citizens for Affordable Energy CEO explained why gas prices go up after a natural disaster and come down slowly during recovery.
â€œTraders are the people who move molecules from the refinery to the distribution points and they will be very sensitive to price opportunities. They make their money when prices [go] up or prices go down. So when there is a chance of a shortage, theyâ€™re going to arbitrage and move prices up as rapidly as they can and then they only drift down,â€ he said.
Hofmeister said gas station owners, who have prepared for the hurricane and have fuel, should be careful of price gouging.
â€œI donâ€™t think anyone is against the idea of making profit, but if you gouge people then you are doing something that really offends the moral conscience,â€ he said.