Newspaper article THE JOURNAL RECORD

Gasoline Prices, Who Benefits, Who's Hurt?

Newspaper article THE JOURNAL RECORD

Gasoline Prices, Who Benefits, Who's Hurt?

Article excerpt

Government-imposed environmental restrictions on building refineries and refining gasoline are harmfully affecting gasoline consumers in Oklahoma and across the nation. They are resulting in shortages and ever higher prices.

Energy, environment and the economy are the three major concerns of the American public today. It is no surprise that they are so closely intertwined. It is obvious government needs to restore a semblance of balance within the equation.

When it comes to gasoline prices this is particularly true. The price of crude oil is a basic factor in the cost. When Oklahoma Sweet crude rose to $35 a barrel last year gasoline prices soared and consumers howled. Today, gasoline prices are significantly higher, while crude costs are about $5 to $8 a barrel less.

Producers are making money but have neither contributed to nor benefited from the recent spate of gasoline price increases.

Supply/demand economics are relatively simple. Supply goes up or demand goes down, gasoline prices go down. Supply goes down, or demand goes up, gasoline prices go up.

While this has been explained thousands of times over in relation to crude oil it applies equally to gasoline.

What drives this equation is more complex. In most of our energy problems, including gasoline and electricity, supply and demand is being influenced by more than simple market factors. Government has become the most intrusive, confusing and debilitating influence on the market system.

Partly because of previous long-term, dirt-cheap gasoline prices, and partly because of our SUVs and other low-mileage vehicles, and rapacity for travel, Americans are consuming huge and ever growing quantities of gasoline. For many reasons refineries in this country are finding it much more difficult to meet the demand.


Evidence reveals many factors are causing high gasoline prices in the nation. The evidence is not new. No new domestic refineries have been built in 25 years, while oil consumption has increased 20 percent.

Petroleum industry people have known it for years and spent much of their time warning consumers and government about it. Their protestations were called self-serving and have fallen on deaf environmental, governmental and consumer ears.

Refinery utilization rates are growing and presently are at 96 percent of capacity so there is no room for routine maintenance, let alone outages. About half of the 300 refineries existing in 1990 no longer are operational. In the near future, we can expect to see some Oklahoma refineries close due to costs of required upgrading.

If the economy, energy and environment triumvirate is to work, all must be given equal consideration. In recent years political submission to environmental demands have placed emphasis on that factor, to the detriment of energy costs to the consumers and the economy. …

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