The story, “California‚Äôs gas prices hit another record high,” Oct. 8, doesn‚Äôt begin to tell the full story of why prices are so high. Gas is approaching its all-time record of $4.62 a gallon in Southern California, set in the summer of 2008, when oil cost $145 per barrel. Given that the cost of oil accounts for about 75 percent of the price of gas, how can we be nearing that record again, with oil at only $90 a barrel?
The oil industry always has an excuse. This time it‚Äôs “refinery and pipeline” problems. But here are the real reasons. Oil companies own most of California‚Äôs 14 refineries. Those refineries now export much more gas than they used to, which creates “shortages” and drives up prices. The same refineries also produce just enough gas so the slightest blip sends oil traders hiking up oil futures and ultimately, what we pay at the pump. It‚Äôs a complex maze of changing parameters no over-worked Department of Energy investigator or Congressional committee will ever unravel.
Bottom line? People know why gas prices are so high. They blame oil companies and oil speculators. And they‚Äôre right. And how convenient, right before an election. The economy always falters when gas prices rise. You can bet the oil companies would just love to stick it to a Democrat president who wants to strip away $4 billion in oil subsidies. Mitt Romney blames the president for high gas prices, but even Mitt knows who is really to blame. And if America puts another oil-friendly president like Mitt Romney in the White House, we‚Äôll all pay the price. We‚Äôll also have no one to blame but ourselves.
John Cyrus Smith