With fuel demand week, refineries shutting down

WILMINGTON, Del. — Refineries from New Mexico to New Jersey are under severe economic pressure because of falling demand for fuel, with a number of facilities shutting down in recent months.

Valero Energy Corp., which shuttered a major refinery over the summer, said Friday it would permanently close its Delaware City oil refinery and layoff 550 workers.

It is the largest largest refinery in the U.S. to close this year.

Refineries in the Northeast are particularly vulnerable because many are older, operate less efficiently and must compete with gasoline imported from Europe.

The Delaware City refinery, where workers were notified of the closing Friday, lost about $1 million every day this year, said Valero spokesman Bill Day.

Demand for fuel has been falling for some time and the recession has made things worse, squeezing profit margins for refiners everywhere.

Refiners are pulling capacity offline and are now operating at levels more consistent with the aftermath of a hurricane in the Gulf of Mexico.

AP