What cause price increases at the pump?

Thomas G. Brown |

As many have noticed gasoline prices hit or exceeded the $3.00 a gallon mark this week. According to the website http://www.gaspricewatch.com The average price in the U.S. is currentlty $3.05. The highest is in where else, California at $4.09. I’m sure come monday morning the talk shows will be clamoring for action against the oil companies and their evil ways. I can just hear some of the talking heads now. “The is disgusting how big oil gauges the average consumer and their needs to be action by Congress to prevent this from happening in the future. Yea that will solve all are problems the collective brain trust in Washington coming up with a plan to save us from the “Oil Terrorist.”

Sadly their is already a bill that the fine Senator Pat Casey D-PA will introduce on Tuesday of this week to tax profits made by oil companies over $50. I’m not sure if Patty Boy realizes this will not solve the problem but instead push oil firms to distribute their product in other countries that will not put what amounts to a price ceiling on the price. If they want to look at what the real catalyst is in gasoline prices they would first have to realize that production of transport fuels has not kept pace with demand. There has not been an oil refinery built in this country since I was born back in 1977. As a result the older refineries have had to run at max capacity over the past several years. With demand domestic and foreign increasing and the breakdowns and disasters that plague our refining infrastructure things will only get worse. The reason for this does not fall at the feet of the oil companies. If they could they would build more refineries as the law of supply and demand dictates. With high prices it would be advantagous to build more capacity with which to capitalize. But, they have had to deal with environmentalist and more importantly local governments who do not wish to have a refinery in their back yards for cosmetic or safety concerns.
So, folks could either drive less, shut up about gas prices or maybe make it easier for refineries to come on line to help reduce the back up in supply. It’s up to local government and the citizens to solve this problem rationally and not the clown college that’s run on the hill


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