Gas prices have been steadily climbing for most of this year - though the costs across the country have dropped slightly in the past week -- and are threatening to become the biggest concern of the summer. The countrywide average price for a gallon of unleaded regular gasoline now stands at just above 3 dollars, up a full 25 cents from the same time in 2006.
Many have directed their ire at the 'Big Oil' companies, who are making huge profits from the high gas prices. However, in an industry as complicated as the oil/gas business it is difficult to locate one determinative factor to point the finger at. Media talking heads have run the gamut, from blasting oil companies, to pointedly noting the lack of domestic oil refining capacity, to acknowledging that the supply of oil may be running short -- although those who posit the latter are discernibly in the minority at present.
Gas consumers all around the country are justifiably vexed about the rising prices. Recently in Texas the average price of retail gasoline went higher for a 14th straight week. A weekly AAA-Texas gas price survey showed that price trends were mixed, with costs reaching record highs in some areas but falling in others. AAA spokeswoman Rose Rougeau said that Texas cities Amarillo and El Paso were at all-time highs, while costs edged lower in eight other cities. Rougeau posited that strong consumer demand, reduced domestic output because of refinery troubles and lower gas imports apparently continue to keep prices high.
In nearby Arizona, gas costs also recently rose for about 14 week in a row. According to an AAA-Arizona survey, the statewide average for a gallon of self-serve unleaded regular was 3 dollars and 9 cents per gallon. That's a penny below last summer's highest price, and moving closer to the all-time record of 3 dollars and 13 cent per gallon set in Sept. 2005.
Getting back to the theories of why fuel expenses keep going higher, the dearth of oil refining capacity seems to be the most repeated response. Some industry commentators blame Congress, asserting that the legislative body is preoccupied with forcing domestic automobile companies to meet unreachable targets for fuel efficiency, while not taking the time to address the oil refining issue. On May 8, the Senate Commerce Committee voted to bump fuel economy standards to an average of 35 miles per gallon by year 2020 for cars and light trucks, with standards rising by 4 percent annually until 2030.
According to some industry observers, Congress has depressed the construction of new oil refining capacity through proposed legislation that penalizes refiners when prices rise, that levies extensive and expensive permit requirements for construction of new refineries and augmenting existing sites, and that allows for an increase in tort risk.
Construction of more refineries would certainly ameliorate the problem of supply, but because they can be so damaging to the surrounding environment, it is very difficult to find a community that will support a new refinery. Under the logic of 'NIMBY' (Not In My Backyard), consumers like to fill their cars up at low prices, but they don't want a refinery close to home.
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Title: Why Are Gas Prices So High?
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