Why did gasoline prices go up?
1) Our economic recovery has increased our demand for fuel.
2) The export of gasoline (petroleum products are our biggest export) has reduced our domestic supply. Global demand is up, especially in Japan, China and India.
3) Bart Chilton, Commodity Futures Trading Commissioner, said in an interview recently that speculation accounts for an extra $7/tank for an Accord and $14/tank for an F150 pickup.
4) Middle Eastern insurgencies have caused supply interruptions and an embargo on Iranian oil is planned to begin soon.
What is not causing gasoline to be more expensive?
1) The President – When Barack Obama was inaugurated the number of active drilling rigs was way down from its historic peak. Now there are more active rigs than at any time since 1975 with the exception of one year in the 80’s. We are close to setting a new record.
2) Oil and gas industries receive unjustifiable subsidies, accounting breaks, and tax favors. These expenditures and tax spending have no effect whatsoever on the price of gasoline, absolutely none.
3) Delaying the Keystone Pipeline decision has no effect on gas prices today. In the long-term, the pipeline increases the price of gasoline. Its purpose is to throughput Canadian bituminous crude for export.
What can be done now to lower the price of gasoline?
1) OPEC could say that they will increase production during the Iranian embargo. (likely)
2) Congress could pass a transaction tax of less than a hundredth of a point in order to slow speculation in the market. (not likely)
3) Congress could impose a tariff on the export of gasoline and other refined petroleum products. (not likely)
4) The Commodity Futures Trading Commission could adopt the proposed final rule that is before them that bans none-users from trading in the market. (likely)
5) The President can release some of the National Petroleum Reserve to offset the price change due to the embargo on Iran. (likely)