At the same time that the price of gasoline is rising, the US oil industry is increasing its exports of gasoline, diesel, and jet fuel.

Yes, you read that correctly.

Compared to a year ago, exports of gasoline have tripled – at a time when the price of gasoline is 42 cents a gallon more expensive at the pump. On Thursday, for example, the price of crude oil remained elevated at $107 a barrel because of fears over the Iranian nuclear situation, and the price of gasoline rose 3 cents a gallon compared to Wednesday, according to AAA.

The oil industry maintains the exports are necessary because domestic demand is weak. The industry says if refiners could not send American-made gasoline to China, India, Europe, and South America, the refineries would have to close as several have already done on the East Coast. Yet, other energy observers say exporting gasoline at a time of rising prices is sort of like throwing flammable liquid on a fire.

“I think it is simply disingenuous to think exports of gasoline are not a factor in the prices,” says Ben Brockwell, director of data marketing and information services at the Oil Price Information Service, which provides petroleum pricing and information to the oil industry.

The issue of US gasoline exports could become controversial if they continue through the summer when average gasoline prices are expected to be even higher than the current price which is $3.61 a gallon according to AAA. By this summer there are some predictions gasoline prices could eclipse the old record of $4.11 a gallon set in July of 2008 and perhaps peak closer to $4.50 a gallon.

President Obama plans to address the gasoline price issue Thursday in Miami. However, he is mainly expected to try to blunt oil industry complaints that his administration is anti-oil company. He will also tout his efforts to get the auto industry to increase fuel standards and the Department of Energy’s efforts to promote clean energy technology.

But, when it comes to oil industry exports of gasoline, there may not be many policy options for Obama unless he wants to start to interfere with the marketplace.

“I don’t think there are any powers the president has that allow him to do that by statute or otherwise,” says Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution in Washington. “I guess behind the scenes he could jawbone the industry to ask them to stop exporting for the good of the nation.”

Mr. Ebinger says the oil industry might want to scale back the exports since “it’s not the best public relations in the world to export when prices are rising at home.” Obama might be able to halt the exports using the war powers act, much like the US did during World War II.

Mr. Brockwell of the Oil Price Information Service thinks it would probably take some kind of legislation from Congress to cut off the exports.

“I guess Congress could institute some kind of tariff or fee,” says Brockwell “I’m not sure if you could do it by executive order.”

The oil industry maintains there is no cause for alarm.

“First of all it is a very small amount,” says John Felmy, chief economist for the American Petroleum Institute (API), which lobbies for the oil industry in Washington. Mr. Felmy estimates exports represent 4 percent of total US gasoline production.

He says the exports are helping some in the refining industry stay in business since they have been buying expensive crude at the same time that domestic demand has been declining. “They are losing money on every gallon they sell and they can’t make it up on volume,” he says. “But people are willing to pay higher prices for gasoline on the international market.”

That demand has resulted in record production from the Gulf Coast, says Mr. Felmy – most of it exports.

Brockwell says gasoline exports, on a four week average, are now running 600,000 barrels a day compared to 200,000 barrels per day a year ago. He says this is the equivalent of three of the largest refineries in the US exporting most of their gasoline production.

“Instinctively, I understand the API not wanting the American public to know so much is exported and tied to high prices,” he says.

If the exports were not taking place, Ebinger at Brookings says it might be possible to argue the refiners would be flooding the market with gasoline which would reduce prices. “If people knew there was a surplus of gasoline, you might get some entrepreneurs in to sell it at lower prices to stimulate demand,” he says.

But, Felmy says that’s not what would happen. He says if the refiners can’t make money, they will have to mothball their operations and layoff workers. The exports are producing jobs, he says. He points out the Gulf Coast refiners are now producing a record amount of gasoline, thanks to the exports.

“Think about it, we’re importing less costly oil, refining and exporting it – that’s a good thing but we’re criticized for it.”

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Felmy disputes Brockwell’s math. He says the cost of producing a gallon of gasoline breaks down to $2.50 a gallon for crude oil and 49 cents in taxes. Throw in transportation and production costs and it’s not hard to get to the current price. He sees no sign that exports are causing prices to rise.

But, Brockwell says it’s showing up on the so-called “spot market” – the daily buying and selling of actual petroleum products – which he says is soaring. “If demand is so low, how can that be?”