Little interest in figuring out gasoline prices

Published on

The Pantagraph (Bloomington, Illinois)

I’m among those hard-headed people not accepting the lame excuses I’ve heard for the huge spikes in gasoline prices.

It’s obvious oil prices in the Mideast aren’t the primary culprit. Mention of possible increases in crude oil prices sends pump prices upward immediately. Decreases in crude oil prices don’t have the same effect.

And I’m tired of hearing people say what bargain prices we have here compared with Europe. We don’t live in Europe.

One reason I accept is that prices are dictated by “supply and demand.” Well, sort of.

We’re a demanding market. We want to drive gas-guzzlers, sometimes for safety; sometimes for fun. We don’t want to harm our environment in the United States, but it doesn’t bother us if we harm environments elsewhere in the world as long as we get cheap oil. Basically, we’ve become a country of taking without giving.

But I’m stubborn enough to believe that the “supply and demand” increases have more to do with automakers’ lock on engine production; refiners and suppliers, especially those who own beaucoup service stations; some of the hard-core environmentalists; and politicians without spines.

Automakers say they are pleasing buyers who want bigger vehicles that drink more gasoline. They fight efforts to force their engines to become more fuel efficient.

Refiners are the gatekeepers for regional gasoline supplies. In other words, they set prices.

Environmentalists who can’t zero in on a uniform national gasoline standard and think high prices will force conservation — a good idea on conservation, but not a practical one — haven’t helped either.

And then there are many politicians who kowtow to Big Oil for political contributions and don’t want to offend the very vocal special-interest groups.

I’m inclined to accept the primary finding of California’s Gas Pricing Task Force of nearly four years ago: have a single, uniform national gasoline standard to ensure less deadly air pollution.

Two task force members, Jamie Court and Tim Hamilton, summarized their beliefs:

“The real problem in the Midwest and California is that the oil companies are using the lack of a uniform national clean-burning fuel standard to manipulate supplies and create inventory shortages that drive up prices without going so far as to create lines at the stations.

“Unlike times past, when such a jump in price would result in gasoline flooding the market, outside competitors cannot get fuel into the high-price areas because of the unique specifications of the environmental cleanup requirements.”

Their report went on to say: “For decades, oil companies and environmentalists have both tried to convince Americans that they had to choose between clean air and affordable gasolines. Many environmentalists believed sticker-shock at the pump would lead to significant conservation.

“At the same time, oil companies coordinated slick public relations campaigns that grossly inflated estimates of retrofitting and manufacturing costs to justify the higher pump price for greener fuel.”

As pump prices climb again, motorists have already begun asking lawmakers to “do something.” We’ve heard it before. And we’ve seen the state and federal investigations into “price gouging.” They have been little more than public relations gimmicks to quiet the masses.

Their aggressiveness is tamed because they know about 50 cents per gallon is caused by state and federal taxes approved by politicians. And they don’t like to be reminded that they are a major cause of high gasoline prices.

Politicians count on consumer interest in “price gouging” fading as prices drop.

It’s time for lawmakers to ignore the squeaky wheels, usually called special interests, and get to the bottom of why gasoline prices can jump 20 cents a gallon overnight.
Bill Wills is editorial page editor of The Pantagraph. He can be reached at (309) 829-9000, Ext. 220, or via e-mail at: mailto:[email protected]

Consumer Watchdog
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