• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • What's the Story with High Gas Prices?

    With gasoline topping $4 a gallon nationally, there’s a lot of speculation as to what actually causes gas prices to soar. Unknowingly, many folks point fingers at speculators and futures markets, claiming these financial speculators, along with big oil companies, take home all the profits. But George Mason economist Walter Williams does an excellent job explaining why we shouldn’t condemn speculation, but rather “recognize the vital function it serves.”

    So, what’s the story behind high gas prices? The Institute for Energy Research  took this question to the gas pump and asked consumers their opinions.

    [youtube]http://www.youtube.com/watch?v=e4dm0O6n_ss[/youtube]

    Undoubtedly, skyrocketing demand plays a large role  in rising oil prices; rapidly developing countries such as India and China demanding more oil as growth surges ahead. And with massive reserves left untapped in the United States, a constricted supply limits the ability to meet rising demand. As The Heritage Foundation’s Ben Lieberman writes, America should focus on expanding supply domestically while  reducing unnecessary, burdensome regulations and taxes.

    Posted in Energy [slideshow_deploy]

    6 Responses to What's the Story with High Gas Prices?

    1. se7en, Provo, UT says:

      Someone should teach Bill O'Reilly an Econ 101 class; if I have to hear his moaning about the price-gouging of the oil companies one more time, I'd probably snap.

    2. Darvin Dowdy says:

      its simple. The opec ministers want Obama for POTUS. For obvious reasons. So they tighten down the spigot and slow supplies in an already super-heated global oil market. They do this knowing that the irrational, unthinking US voter will take the knee-jerk path of least resistance and blame George Bush and the Republicans for the high prices at the pump. Egged on by the biased MSM and the dem's.

      Its working like a charm isn't it? DD

    3. Mark P., York, PA says:

      I believe we need to start by throwing out all of our "elected officials" inside the Beltway and put some people in office with some common sense. Granted, drilling now may not immediately lower prices at the pump but it will eventually ease the pressures. I like the idea of an Executive Order lifting the Dem's ban on offshore and ANWR. I also like the idea of a federal and state tax holiday. Nothing will happen with our current lot of self absorbed politicians so I say throw them out and start over!

    4. Big Al in the Dismal says:

      Speculation DOES serve a vital function, BUT it is also a means of pushing prices. Some people play up, some down. Right now there are many playing up the price, and we see the resulting volitility in the market by every little 'thing' shooting the price higher and higher. Meanwhile producers look for places to store the oil they pump, for there is more than enough oil on the market to supply demand for now. IF there was an increasing market with resulting shortage do you seriously think we'd have to beg them to pump more of the stuff? They are, after all, in the business…supplying demand. Limiting supply to push prices is counter productive to their long term interests, which is extending the market for oil (one of their only resources).

    5. BG Pflugerville Texa says:

      The speculators and the Congress are bringing the country and its people to a halt. The speculators are going above board to reach above board profits, and Congress is utilizing its control of the citizns by doing nothing. The speculators, the auto industry, the enviornmentalists (extreme ones) and the Congress are not interested in the welfare of the country or its people about high energy costs, all other high costs of everything,drilling for our own oil, coal, and gas. None of these groups are interested in devloping nuclear energy or anything positive that would benefit good sound business, or the people's livelihood.

      I am of the opinion that our national crisis has been deliberate. The election of a new incoming President will not make things better for America.

      It is Congress that makes, amends, changes the laws. I also blame the everyday American people for allowing this to happen to ourselves because we are the government; however, we have allowd our Federal and State Repesentatives and Senators and Governors do what ever they want when they want, or not do what they don't want to do.

      Please stop telling me to drive 55 miles per hour, insure my tires are inflated properly, use mass transportation (especially, in areas where there are none), spend tons of money to buy newer, more expensive cars that get 28-34 miles per gallion.

      Make cars that get 50 or more miles per gallon

      that are reasonably priced. GM, I feel for the people who work for you, to make cars, but I don't feel sorry that your Motor company may go under-you did it to yourself for not keeping up with the real needs of fuel economy in our nation.

      Congress, you are a sorry bunch of lawyer-politicians who do everything to prevent drilling for our own oil, gas, coal and giving the go-ahead for finding reasonably priced alternative sources of energy at the same time.

    6. Larry says:

      It never cease to amaze me that our Congressional leaders continue to burden the American public with this issue year after year. When these people took over the Congress in 2006, they indicated how they wuld help reduce our dependency on foreign oil. All they have done instead was made us even more dependent on oil from foreign sources. They have banned exploration in many areas that hold the key to our future in our own country.

      I say let's throw all the bums out and start anew.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×