Tuesday, April 22, 2014
It’s a sure sign of spring when trees are engulfed with green leaves and flowers are blooming. Oh, and gasoline prices are on the rise.
The average price for regular gasoline at U.S. pumps jumped 8.5 cents in the past two weeks to a 13-month high of $3.69 a gallon, according to the latest survey of prices. Frankly, that doesn’t sound too bad in Walla Walla where the prices are closer to $3.79 a gallon.
This increase (up 43 cents a gallon for the year) is being attributed to a rise in crude oil prices and a higher demand for motor fuel, according to Energy Information Administration data.
Plausible. However, these and other plausible (or semi-plausible) explanations are rolled out year after year just before school lets out and families hit the road for summer vacations. It’s suspicious.
Escalating gas prices in Washington state have been investigated numerous times over the past two decades. The majority of those investigations were spurred by the late Rep. Bill Grant, D-Walla Walla, when he served in the state House. The Attorney General’s Office as well as other agencies could never find enough evidence to prove shenanigans.
Two years ago, then-Gov. Chris Gregoire launched an investigation because gasoline prices were higher in Washington than other nearby states. Once again, nothing nefarious could be pinned on Big Oil.
The higher prices were blamed on a refinery fire near Bellingham. Why would higher prices from a refinery fire in the northwest corner of the state not be felt in Oregon or Idaho?
It can’t be fully explained, just as the disparity in prices between Walla Walla and the Tri-Cities or Yakima have been an annual head scratcher.
Our conclusion is that gas prices rise beyond a normal supply-and-demand boost for a slight increase in miles traveled because consumers have no choice but to pay what is asked. Gasoline has become an essential part of Americans’ daily lives, like electricity or water.
Yet, the government regulates prices of electricty so consumers are not unfairly gouged.
Big Oil and the refineries they own are an oligopoly, a market dominated by a small amount of sellers. Perhaps Big Oil has refrained from charging as much as possible because doing so would tempt strict government regulation and topple the U.S. economy, thus killing the proverbial golden goose.
Still, they can’t be trusted to not take advantage of our need for gasoline.
Government oversight could be coming sooner rather than later unless this pattern of annual profit-generating price spikes subsides.