There was a time when everyone wanted to get the largest SUV's in the market and more than a half of cars on the freeways were SUVs and big trucks. Everyone thought that gas price was going to stay low forever. That wasn't a long time ago.
Now, the same people with big SUVs and big trucks are angry over gas prices at the pump. The petroleum paranoia is growing and pointing fingers are everywhere.
There is no question. Oil companies' are ripping all time high profits. Consumers are starting to be suspicious about them and their gouging question has been surfaced. Top of that, it stirred up many people's outrage when Exxon's chairman, Lee Raymond's outlandish $400 million dollar retirement package deal hit the news.
Meanwhile politicians in Washington started to play blame games: Chuck Shummer asked for couching up all oil companies' profits, House Speaker Dennis Hastert and Senate majority Leader Bill Frist showed a pretentious concerns and have called on President Bush to investigate price gouging by the oil companies. The president Bush called for an end to tax breaks for them and suspended putting oil into the U.S. emergency stockpile.
No doubt, oil companies may have jacked up prices a bit more than was dictated by market conditions. Even though, their profits has increased noticeable amount on recent reports, but their return on investments have not been extraordinary compared with companies in other industries.
The main reason of the price increases has been the rising cost of crude oil, which is determined in a world market. Especially oil producing countries such as Iraq, Iran, Venezuela, and Nigeria have not been stable politically.
In addition, the rising prices of crude oil are just a continued reflection of the worsening supply and demand for example, increasing demand from China and the other Asian countries. However, rising gas prices in a world market is not as simply as supply and demand theory. The forces of price fluctuation are complicated and mostly uncontrollable.
Currently, crude oil price is more than $70 a barrel and 37 percent higher than a year ago according to the federal government's Energy Information Administration. Many people expect to be worse by the change of seasons. The price of other products and services will go up as well.
It doesn't really matter to some people about all the forces in world politics and economics that play into higher prices at the pump, the petroleum paranoia will stirrup demagogues and they will continue to play on blame games. Stopping the tax breaks and investigation of price gouging by the oil companies can control the rising price of gasoline is laughable. The foolish belief of our politics is that the oil market works only when prices go down. It is about time that we need to look at domestic supply possibilities along with other energy resources instead of relying on foreign oils.
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