Gasoline Price Gouging.

Ξ May 25th, 2007 | → 0 Comments | ∇ Main |

Pains at the Pump

May 25, 2007

Wall Street Journal, Page A14

It’s Memorial Day weekend and the start of the summer driving season, so naturally it’s time for Congress to grandstand against $3-a-gallon gasoline. And right on cue, the House passed legislation this week to criminalize gasoline “price gouging,” whatever that is. (Does that mean every Congressman is a felon?) Perhaps this is all designed to distract the public from Congress’s own role in raising gas prices.

Under the anti-gouging law, service station owners could face up to 10 years in prison if they dare to raise their prices too much when supplies are low. Representative Bart Stupak, the Michigan Democrat who sponsored this scheme, said the vote would determine whether Members “side with Big Oil” or “side with consumers who are being ripped off at the gas pump.” Who elects these guys?

The inconvenient fact is that there’s no evidence of price rigging by Big Oil or the tens of thousands of independent service station owners across America. The causes of higher gas prices include $65 per barrel oil caused by rising global demand and geopolitical tensions; a record high U.S. gasoline consumption of 380 million gallons a day; and refined gasoline shortages caused by Congressional rules and mandates. (…and irrational fear of nuclear power.) Far from withholding production to raise prices, U.S. gasoline production of 8.8 million barrels per day is higher than any time in history and refineries are getting more gas per barrel of oil than ever before. (more…)