I have been reading the headlines about the price of oil shooting up at an incredible rate like most people. The press and government claim this is caused by the middle-east unrest, others claim that it is because the speculators are pushing the price higher. Regardless of the reason oil prices are going up, the bottom line is gas prices are going up. The increase in gas prices will have a real impact on the economy, I wrote a similar story back in July 2007 called Price Gouging at the Pump at the time it was a concern that if gas prices stayed above $3 a gallon it would drive the country into a recession. At the time a lot of people claimed that the price of oil led to the high gas prices, but as we have seen during the past 2 years oil prices dropped all the way down to just over $30 a barrel. The gas prices did not drop much under $3
a gallon when in reality they should have dropped to under $2 a gallon. Instead of gas prices dropping what refineries were doing is stock piling the gas and increasing their profits. Now that oil is over $100 a barrel the price of gas has gone up to $3.50+ a gallon. There is still a surplus of gas in storage, as a matter of fact, the U.S. has so much excess gas refineries are exporting gas to other countries and it's still not reducing the excess.
Today the government is looking into releasing oil from the national reserve to stablize and possibly reduce the price of oil in hopes of reducing the price of gas. Let's face it, the current price of oil has nothing to do with th current price of gas. The oil storage tanks are full, the gas storage tanks are full. Releasing more oil to the market will not drop the price of gas. At this time the government has only 1 option, treat gas like a utility and put a price cap on it until the excess has been reduced to levels that would warrent a price increase. If the price of oil over the past year averaged about $70 a barrel then the price for a gallon of gas should be about $2 and that should be the cap. The president should list this as a matter of national security to keep the Republicans from stopping it as a favor to their friends in the oil and gas business, I do understand that polititions are given campaign contributions and in return they do
favors for the people or companies that gave them the money. The U.S. is one of the few countries that I know of where giving money to a politician for a favor is actually legal, most countries call this bribing but here it's called campaign contributions. As for the investors that bought gas and oil futures, too bad. It's about time that you gave some of your profits back to the country that made you millions over the past several years, call it an investment. The more money people have the more they will spend, if they are not spending their money on gas and food, they'll start to buy other things.
The absolute bottom line is, "There is no oil shortage, there is no shortage of gas." There is a shortage of jobs and that issue should be addressed and treated as a matter of national security. We are already seeing what happens when people don't have jobs and the price of food increases, our government really needs to make sure that doesn't happen here. But so far no one in Washington D.C. has a real grasp of what is going on or how to fix it while keeping their campaign contributions coming; or maybe they do know how to fix it but they can't because they have been bought.
