A week after U.S. gasoline prices hit a near-record $3.05 a gallon Steven Mufson, of the Washington Post, reports Democrats in Congress are promoting legislation that would effectively break up the giant oil conglomerates, although industry analysts are less than encouraging regarding any positive, permanent outcome.
Standing in front of an Exxon station near the Capitol on Wednesday Senator Maria Cantwell of Washington promoted an anti-price-gouging bill, which the Senate Commerce Committee had adopted on Tuesday. Meanwhile, Senator Bernard Sanders of Vermont slammed the profiteers by stating: “I think it’s time to say to these people, ‘Stop ripping off the American people,'” as he pushed for a windfall profits tax aimed at the nation’s five biggest oil companies who have shown $440 billion in profits over the past six years.
Just last month the government’s Energy Information Administration predicted that regular unleaded gasoline would average $2.95 a gallon this summer, 11 cents a gallon more than last summer. They revised their prediction this week stating that “continuing problems for refineries in the
United States and abroad, combined with strong global gasoline demand, have raised our projected average summer gasoline price by 14 cents per gallon.” For most American’s the rise in gasoline prices have caused a financial hardship with 36 percent, according to an ABC News poll, reporting that the hardship is a serious one.
However, this outrage over gas prices is not new and over the past four years has become a spring ritual with Congress considering consumer rebates, taxes on oil inventories, etc., with each fading into oblivion as the end of the legislative session approached. Nevertheless, be it Democrat or Republican the problem remains that the U.S. is going to need to obtain some type of supply component for energy, such as oil from Alaska, if they ever hope to get prices down.
On the other hand, Americans need to be thankful since, according to CNN/Money, gasoline prices in the U.S. are actually lower than in many countries where consumers are forced to pay nearly 3 times more than those in the U.S. The difference in the cost according to AirInc, is the amount of taxes incorporated into a gallon of gasoline by individual governments with some applying as much as a 75 percent tax to the cost of a gallon of gasoline. Another factor involved in the price can be caused by Futures Traders who buy and sell on news like oil shortages due to environmental events, like Hurricanes.
According to Richard Clough, author of The Truth Behind High Fuel Prices oil companies will use any excuse to raise prices and it is the only industry in the world that controls the market by fear. They have the power to do this because they are a cartel and the “Big 5” operate this industry like OPEC operates its business by controlling production and supply. For additional information about Clough’s book, visit his site here .
Another issue of note is that a few months ago on one of the news shows the Sultan of Saudi Arabia sat next to President Bush and openly declared that the problem the U.S. had was their lack of working refineries not his willingness to supply us with as much oil as we could use. Given that wouldn’t it make sense to develop more refineries, drill or create more oil from our national shale, or go all out to develop a working alternative to oil such as enriched ethanol? I believe that the problem is the government officials who are in cohorts with the oil companies who are big contributors to their political campaigns and who are interested more in the power of their office than in using the office that they are elected to for the good of the American people.
[tags]gas prices, oil, cartels, Democrats, Big oil companies, Big 5, Bush Administration, Saudi Arabia, Alaskan oil, The Truth Behind High Fuel Prices, Richard Clough, [/tags]