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May 24, 2007
High gas prices raise questions of gouging
Katrina and Rita are factors, but some critics blame oil companies for exploiting the market.
By Mark Trumbull | Staff writer of The Christian Science Monitor
By tearing through the engine room of the US economy, two hurricanes have pushed gas prices to record highs and stirred a different kind of storm: populist anger at alleged price gouging.
State and federal agencies are probing thousands of consumer complaints. And some lawmakers are urging a tax on the oil industry's "windfall profits."
Though hurricane Rita didn't pack Katrina's punch, some analysts say the aftershocks could be enough to keep gasoline prices high for a while.
The recent $3+ peak virtually matched the inflation-adjusted high reached in 1981. One economist reckons that gasoline shouldn't cost that much until oil nears $100 per barrel - about $35 higher than it is today.
So where is that money going? Are profiteers manipulating the market? Economists say oil producers and refiners, not gas stations, are reaping a windfall. Judging by history and laws of the market, it will be very hard to find evidence of impropriety. Mindful of growing public anger, President Bush Monday pledged to tap federal reserves if needed.
Posted by Post Scripts at May 24, 2007 09:00 PM