Justifications have been popping up like dandelions in spring to explain why gas prices have spiked in the last two weeks. They’re like the Energizer Bunny, they keep going and going and going and going.
We can’t help but think somebody’s getting rich off our $1.78 a gallon. We know it’s not local station owners. They hate the unstable prices as much as we do. But who? Could it be Big Oil? Little Oil? Medium Oil?
The reasons given for the rocket-ship price increases are all over the map, literally and figuratively.
Iraq, post-invasion, is producing about a fifth of the oil it was exporting before the war.
The blackout shut down refineries in three states while a ruptured gasoline pipeline in Arizona has the desert southwest thinking Jimmy Carter is back in the White House, bringing with him rationing and long lines at the pump.
A strike in Venezuela cut that country’s oil production. And major producers, such as Russia and Saudi Arabia, are content to accept higher per-barrel premiums for their oil.
Meanwhile, demand is said to be outpacing supply. According to the Energy Information Administration, demand for the four weeks ending Aug. 15 is up to an average of 9.4 million barrels a day for the United States, which is about a 1.8 percent increase over last year.
Fingers are even pointing at the weather. A wet spring is driving up demand now as vacationers take advantage of summer’s last weekend to make up for rained-out trips in June, and hurricanes in the Gulf of Mexico have cut domestic production.
Some of these reasons might sound familiar. We heard them in March when gasoline prices also rose sharply.
We’re puzzled at the dramatic increases, regardless of the alibis. So is Sen. Susan Collins. She’s called on the secretary of energy to explain why gasoline prices have jumped as much as 10 cents in one day in Maine.
Collins says there appears to be no readily identifiable reason for dramatic fuel costs increases. We hope she gets an answer.
But it might not come before the problem temporarily disappears. AAA predicts that prices will begin to fall in a couple of weeks. Even so, Collins should keep the pressure on the Energy Department for an explanation.
We predict another price crunch, probably right around Thanksgiving, when the weather and world events again will conspire to produce another gasoline shortage. There will be severe weather somewhere, hampering distribution, some developing country will “become” unstable, families will be driving more as they make up for trips postponed earlier in the fall and several refineries, maybe on the West Coast or in Canada, will be off-line for repairs.
Ready for the punch line. Forecasters say that heating oil could surpass $2 a gallon this winter. Natural gas prices are also primed to climb, maybe as high as $15 per million Btu. And the Farmer’s Almanac says it’s going to be another cold, snowy winter, maybe starting especially early. Who would’ve guessed?
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