By Michael Phillips | MDBayNews
FREDERICK, MD — President Trump summoned about a dozen oil refining executives to the White House this week and pressed them, face to face, to bring gasoline and diesel prices down. It was a striking scene: a Republican president publicly leaning on an industry that just posted its most profitable quarter since Russia invaded Ukraine.
The numbers explain the political pressure. Three of the country’s largest independent refiners — Marathon Petroleum, Valero Energy, and Phillips 66 — reported a combined $12.6 billion in second-quarter profit, the strongest since 2022. Marathon alone posted diluted earnings per share of $17.73, up 348 percent from a year earlier, as its refining margin more than doubled, from $17.58 to $36.33 a barrel. Instead of expanding output, the three companies funneled $6.3 billion back to shareholders in the second quarter alone through buybacks and dividends — more than double what they returned in the same period last year. Phillips 66’s board approved a $10 billion increase to its repurchase program in July. Valero authorized another $5 billion on top of what it already had available.
None of that windfall has shown up at the pump in Maryland.
“None of that windfall has shown up at the pump in Maryland.”
What Marylanders Are Actually Paying
As of September 1, AAA put Maryland’s average price for regular gasoline at $3.93 a gallon, with the national average at $4.10 — both far above where prices sat a year ago, when the national average was $3.19. Diesel is worse: the national average has climbed to $5.63 a gallon, up more than 52 percent year-over-year, and Maryland drivers have seen local diesel prices brush up against $6 for months. The Maryland State Highway Administration’s Office of Construction — which tracks diesel prices monthly to adjust payments on state highway contracts, not as a general market benchmark — put the prevailing diesel price at $5.325 a gallon for July.
The trigger, largely, was geopolitical: fighting between the U.S., Israel, and Iran beginning in late February disrupted flows through the Strait of Hormuz, a chokepoint for roughly a fifth of the world’s crude trade, and sent oil prices spiking. But geopolitics explains the crude price shock. It doesn’t fully explain why refiners are converting that shock into record margins rather than record output — or why relief hasn’t reached Maryland drivers even as refiners banked the difference.
“Geopolitics explains the crude price shock. It doesn’t fully explain why refiners are converting that shock into record margins rather than record output.”
The Small Business and Trucking Squeeze
“Independent truckers and small retailers don’t have Valero’s or Marathon’s hedging books, buyback authority, or balance sheets. They absorb volatility. The refiners profit from it.”
The pain isn’t evenly distributed. Maryland Motor Truck Association leadership has been blunt that trucking has essentially nothing without diesel, and that rising fuel costs get passed straight through to everything trucking touches — freight rates, grocery prices, delivery costs. Industry analysts have warned that if diesel prices hold above $6 a gallon nationally, thousands of small carriers and owner-operators without fuel-surcharge protection in their contracts could be forced out of business this year, a shakeout that would tighten trucking capacity and push freight costs higher even after crude prices eventually ease. Maryland small business owners were already describing the same math back in April — rerouting deliveries, eating costs they couldn’t pass on, and warning that continued pressure could force some to close.
Independent truckers and small retailers don’t have Valero’s or Marathon’s hedging books, buyback authority, or balance sheets. They absorb volatility. The refiners profit from it.
Maryland’s Own Tax Adds to the Load — Automatically
There’s a state-level layer to this that gets little attention: Maryland’s gas tax adjusts automatically every year, tied to inflation and average fuel prices, under a formula the General Assembly put in place in 2013. This year, that meant an increase — not a decrease — even as the state’s own comptroller acknowledged that high pump prices are squeezing residents. The gasoline tax rose to 46.6 cents a gallon and the diesel tax to 47.45 cents, effective July 1, stacking a modest but automatic state increase on top of a fuel market already running hot.
“Marylanders are paying more in tax on fuel that already costs more, in the same year refiners are posting record margins on it.”
The Board of Revenue Estimates said the war wasn’t the direct driver of this year’s adjustment, since the formula looks at a trailing 12-month average — but the timing lands the same way regardless: Marylanders are paying more in tax on fuel that already costs more, in the same year refiners are posting record margins on it.
Where the Accountability Questions Sit
At the White House meeting, refining executives reportedly used their time with the president to lobby against federal biofuel-blending mandates, arguing the Renewable Fuel Standard is what’s actually driving pump prices higher — a claim that conveniently shifts scrutiny away from refining margins and shareholder payouts. The EPA granted a batch of small-refinery exemptions from those blending requirements the day before the meeting. Whether that regulatory concession translates into any relief for Maryland drivers, or simply widens the margin further, is the open question — and one that federal disclosures on refinery-level supply data and Maryland’s own fuel-price monitoring should be able to help answer as the year plays out.
Sources: AAA Fuel Prices (state and national averages, Sept. 1, 2026); Bloomberg; Reuters/Hydrocarbon Processing; Zacks/Yahoo Finance (Marathon Petroleum, Valero, Phillips 66 Q2 2026 earnings); Maryland Comptroller’s Office motor fuel tax determination (June 2026); Maryland State Highway Administration, Office of Construction, diesel fuel price adjustment memo (Aug. 3, 2026, roads.maryland.gov); WMAR-2 News; Baltimore Today; FleetRabbit and DOT Operating Authority industry analysis.
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