Big Oil is at it again, ladies and gentlemen. In California, many parts of America's largest state are already seeing prices north of $3 for a gallon of gasoline. And in the rest of these United States, prices are rising to match.
According to the Los Angeles Times, the average price of petrol in the lower 48 is now $2.50 per gallon. Already analysts and purported experts have crawled out of the bushes to chime in that the rising costs are due to refining capacity this, pipeline problems that.
True, the oil markets are trigger happy - an easterly breeze can blow in Saudi Arabia that will in turn prompt prices of crude to skyrocket in London. But there does seem to be a deliberately fishy pattern to these price increases. There timing is always just so - well timed.
Even if it was not yet the heat of summer or the height of the travel season, ladies and gentlemen, and yet it seems that we've broken a record. The average pump price for regular unleaded gasoline in these United States is now at a high of $3.07 per gallon. Last year held the previous record which saw national averages spike to $3.03 per gallon on August 11th.
According to an AP report that included an interview with an industry analyst, the higher prices are due to faulty refineries. "The recent increases are due mostly to refinery problems, [Oil Analyst Trilby] Lundberg said, noting there have been at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.
One of the nation's largest refineries, a BP PLC plant in Indiana that processes more than 400,000 barrels of oil per day, will not be operating at full capacity for several months due to unexpected repairs.
Other examples include a 170,000-barrel-per-day plant in McKee, Texas, which was shut down for a month, and a 470,000 barrels-per-day plant in Texas City operating at less than half capacity."
In the face of what some say are America's highest average gas prices ever, the U.S. House of Representatives has passed the Federal Price Gouging Protection Act that permits the government to charge offending enterprises up to $3 million for "taking unfair advantage of consumers".
If the legislation passed, seems like every gas station in America should steel itself for a lawsuit from the Federal Trade Commission. But critics say that the bill's loosely defined terms give federal investigators little in the way of "teeth" to chew the cud of ruthless petrol profiteers.
Plus, President Bush has promised to veto any such legislation under the pretext that such improved oversight powers given to the FTC might pinch energy supplies. Yeah, what he said. I guess there's little doubt whose side this president is on. It sure ain't the motorists of America.
Reuters reported that the record gas prices currently afflicting the U.S. (and world) consumer is having an impact on consumer spending. With the national average remaining at around $3 per gallon of unleaded, buyers are having to cutback on "personal consumption expenditures" like taking roadtrips or eating out.
"When gas prices spike, there seems to be a downturn in other discretionary spending, particularly retail spending," said AAA spokesman Geoff Sundstrom.
When will prices come down finally? No one, least of all the federal government knows for sure. But historical patterns point to September as the month when prices ease.
