Summer, of course, is generally the time when gasoline prices shoot through the roof. Last year they briefly went so high that President Bill Clinton ordered the Justice Department to investigate oil companies for price fixing. On July 28, 1997 CNN reported that in the midst of the summer gasoline prices continue their now seven-month long decline (the average price of gasoline nationally was $1.24 per gallon on July 25).
For those who think this is an excessively high price, the American Petroleum Institute estimates that over 1/3 of the cost of a gallon of gas goes simply to pay various federal, state and local taxes.
Oh, and for those concerned by reports of what are often characterized as low levels of oil in world reserves, a report last year by the American Institute for Economic Research explains the reserve situation has nothing to do with total available oil supplies but instead is a profit maximizing strategy by oil companies. As the AIER puts it, “Supplies (inventories) of petroleum in general are low, as are U.S. inventories of gasoline, in particular. Oilmen around the world have been trying to avoid holding excessive amounts of what could prove to be high-cost oil when and if Iraq is again allowed to sell in the world markets.”
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