High Gasoline Costs

by Kerry Thomas

August 31, 2003

Who's responsible for high gas prices? Before we all go and point fingers at the petroleum industry, maybe we should look in the mirror first.

Collectively, we have demanded our government, through Congressional mandates and the Environmental Protection Agency (EPA), clean up our environment. The EPA , in response, has mandated oil and gas refineries produce numerous different blends of gasoline for different arteas of the country, and different blends of gasoline for the summer and winter seasons. As a result we see prices rise in the Spring and the FAll, when refineries must begin to switch from summer blends to winter blends and backl again, causing a drop in available supply.

This little regulation also means that the same gas you buy in Chicago can't be sold in Detroit or St. Louis. Each area requires it's own seperate blend of gasoline. And there are only a limited number of refineries still in operation to do the job. We haven't allowed a new refinery to be built in America in more than 20 years. And those that are still in operation haven't been allowed to modernize or expand capacity without meeting the newer stricter EPA standards.

Now think about that. What are you still using in your daily life that is the same technologically today as it was in 1980?

Yes, oil refineries do pollute. So do electrical generation plants. So do most manufacturing facilities. But we keep demanding the products and services they produce. Let's see, if I remember something about economics, something like the law of, what was it again, supply and demand? If we keep demanding the product, and there's only a limited supply, what happens to the price? That's right, it goes up.

Any business is in business to make money. And oil companies are no exception. When they can charge more, they do. But let's not put the entire blame for rising gas prices on the suppliers. Like so many other problems we face in this country, our burdensome government regulations play a big role in this one too. Just ask any business owner how much time he spends filling out government forms and complying with government regulations.

Now, shall we discuss our state gasoline taxes?