Fuel Prices: Rhyme or Reason?

The high price of gasoline has been and continues to be a driving factor in consideration of energy policy proposals. Despite passage of the massive Energy Policy Act of 2005 (EPACT 2005, P.L. 109-58), and the Energy Independence and Security Act of 2007 (H.R. 6, P.L. 110-140), numerous other proposed initiatives remain under active consideration in the 110th Congress. Measures proposed include repeal of some tax benefits to domestic oil and gas producers contained in EPACT2005, provisions on price gouging, and reform of oil and gas leasing in the Gulf of Mexico. A large number of factors have combined to put pressure on gasoline prices, including increased world demand for crude oil and limited U.S. refinery capacity to supply gasoline. The war and continued violence in Iraq added uncertainty, and threats of supply disruption have added pressure, particularly to the commodity futures markets. Concern that speculation has added volatility and upward pressure has frequently been cited. This book tries to identify the apparent causes of the wild swings in this most visible of expenses.