Who's to Blame for the High Price of Gas?

"If you give them the benefit of doubt, then they have horribly mismanaged this industry," he told ABC News. "They can't switch from winter to summer fuels without driving up the price a buck and they get away with it."

Michelle Foss, chief energy economist at the Bureau of Economic Geology at the University of Texas in Austin, disagreed.

"Companies are not going to make gasoline when no one wants it and then sit around and wait for customers. Why would you do that?" she asked. "That's nuts. When you are in the time of year that no one wants gasoline — winter — you don't make much of it. Then, when you head into the driving season, you make the switch."

And just as oil companies say they don't set the price of oil, refiners say they don't set the price of gasoline.

"I would love to dispel this rumor that somehow refineries are holding back production because they see they can get profits later on," said Charles Drevna with the National Petrochemical and Refiners Association. "Seeing where margins are now, you want to be running. You don't want to be shut down."

As of the week ending May 11, the government reported that refineries operated at nearly 90 percent of their total capacity, processing 15.3 million barrels of crude oil per day, up .5 percent from a year ago. The refineries produced 9.1 million barrels of gasoline per day, up from the previous week.

Consumer demand for gasoline, however, was 9.3 million barrels of gasoline per day, up 1 percent from a year ago. To meet this demand, the United States imported 1.5 million barrels of gasoline per day.

Congress Investigates

But drivers and elected officials have not been convinced by oil industry explanations. And as prices increase and oil profits grow, so do the number of congressional hearings and investigations by federal and state authorities.

May 8: House Energy and Commerce Committee hearing on alternative fuels

May 9: House Select Committee on Energy Independence & Global Warming heard testimony from individuals and small businesses affected by higher gas prices.

May 10: House Science and Technology Committee examined green transportation.

May 15: Senate Energy and Natural Resource Committee heard from government and industry analysts on the outlook for gasoline prices this summer.

May 16: House Judiciary Committee examined "whether anti-competitive practices in the oil and gasoline industry are causing record gas prices."

May 22: House Oversight Subcommittee of the Energy and Commerce Committee will hold a hearing entitled "Gasoline Prices, Oil Company Profits and the American Consumer."

"The government doesn't set prices, but we do have a responsibility to prohibit price gouging and unfair manipulation of the markets," said Rep. Heather Wilson R-N.M., in her prepared statement during the Judiciary Committee hearing. "Opportunists should not be able to reap ill-gotten windfall profits on the backs of America's families, particularly when disaster strikes."

Wilson has introduced the Federal Energy Price Protection Act, which would prohibit price gouging at the federal level as there currently are no such laws. Only 30 or so states have regulations barring gouging.

  • 1
  • |
  • 2
  • |
  • 3
  • |
  • 4
Join the Discussion
blog comments powered by Disqus
You Might Also Like...