2-19-08 by dugan
Let’s see. Gasoline is up eight cents a gallon in the last week for regular. Oil prices hit $100 a barrel today, ginned up by speculators "worried" about Venezuela, Nigeria, a refinery fire in Texas, you name it. Refiners are cutting back production deliberately, aiming to drive the price of gasoline up further. Gasoline today, at over $3.04 a gallon nationally, is less than 20 cents a gallon below last May’s all-time record. At the current rate of price increase, that figure would be less than three weeks away. $4.00 gasoline would be only a few months away, and may well arrive by May. And yes, you should be spitting mad.
Worldwide consumption of oil is flat. In California, gasoline consumption has been down for a year and a half. It’s also down a bit nationally in the last couple of quarters. The U.S. and other economies are sagging. If oil was responding to what the economists call "market conditions," it would be maybe $60 a barrel, probably less. If the refining business was really competitive, refiners would be swallowing a loss right now, trying to gain market share so they’d make money when the price of oil fell to rational levels. But none of those things are happening.
When markets are broken, it’s up to government to take action. Here’s the site where you can pound on your elected representative. Just fill in your ZIP code and write a short e-mail. Tell him or her you want oil trading regulation, refinery operations oversight and lower gasoline prices. Tell them gasoline is not a competitive market, and oil prices are being driven by specullators. Do it now, or you’ll feel bad the next time you have to haul out the credit card at the gas station.