Valero sold their Aruba refinery because it doesn't suit their forecast - it was set up to process the kind of crude that they don't believe will be most profitable to do so going forward. Whether that was a smart decision or not, only time will tell. Valero is a well run company, but not infallible. It's very difficult for non-integrated refiners to make confident decision about utilization and other such matters at the current time. I don't think this period of great uncertainty will last much longer, however.
It'd still be a 'free market'. Just a free market with a permanently high gas tax. Like I said, prices would still be free to move up and down.