Gas price still hiking when oil price is dropping

Article: http://www.cbc.ca/canada/story/2008/09/12/gas-prices.html

Over the past few weeks, the crude oil price has dropped significantly. However, the gasoline price of shot up 13 cents per litre last Friday when hurricane Ike was hitting Texas. That is even more expensive than the summer when oil price was at record high close to $150 USD per barrel.

I don’t know what is so wrong with the pricing mechanism of gasoline, but what I find it most bewildering is how come Canada, as an oil-producing and exporting nation, have to suffer from such high gasoline price when the hurricane is not even hitting our shores!

I am a zealous believers of free market economy so I am not even going to ponder the notion of nationalizing our oil industry in Canada. Trade is based on the idea of comparative advantage and all trading partners are better off as a result of trade. Better off means that the total output (hence consumption) is higher. However, if most of our oil are sent to the United States and in turns, we have to buy the gasoline back from them, how is this better off for Canadians? Perhaps it’s time to consider investing in building more oil refineries to increase capacity?