February 27, 2012
With the national average price of gasoline $3.60 or higher, many are wondering why gas prices have jumped 20 cents just one month’s time. Gas prices in California and New York have already surpassed the $4 per gallon mark and relief is not in sight.
Last week, President Obama addressed the issue of rising gas prices. He took many facts out of context and suggested he wants to micromanage the solution from Washington.
- Half-truth #1: Oil production is the highest it has been in eight years.
- Half-truth #2: Increasing oil production takes too long and would not impact the market for at least a decade.
- Half-truth #3: Oil is not enough. America has only 2 percent of the world’s oil reserves.
- Half-truth #4: Oil is not enough. The country needs an “all-of-the-above” approach to reduce its dependence on oil.
- Half-truth #5: Speculators are driving up the price of gas, and they need to be reined in.
The obvious solution is allowing the markets to work and not micromanaging from Washington. Given the choice, consumers may switch to more fuel efficient vehicles and oil companies will increase their production to match demand. But only if the policies in place do not restrict oil exploration, refining and production. Policies that do so only artificially drive the price higher.
Are you feeling pain at the pump?
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