Lynne Stevens
Ah those pesky gas prices, up again.
I see all those fingers pointing at the White House. It would be nice if it was that simple.
First, North Carolina takes a 35-cent tax on every gallon and the feds take another 18.3 cents. That is 53.3 cents a gallon, non-negotiable.
That is just the beginning. About 50 percent of the cost is the world price of a barrel of oil and then refinery costs each with a profit attached.
Next are the costs and profits of distribution to your tank. Big-oil tankers have recently been attacked by foreign pirates. If there is an oil leak, it will cost the shipper millions in environmental cleanup.
And yes, we end up paying.
After COVID, the storage tanks were full due to low travel demand.
The refineries had to be put back in operation and employees brought back. It’s not like flipping a switch.
As demand increased and refineries were not at full operation, prices got higher.
To lessen the pain, Biden authorized oil released from the Strategic Oil Reserve. Sanctions on Russia caused disruption in oil distribution and caused a demand for United States oil overseas. Remember, oil is priced worldwide – not locally – and this country has no national oil policy, so big oil can do what it wants.
If oil prices get high, that is incentive for them to sell more oil to the highest bidder – likely overseas.
There is a big misunderstanding that the U.S. imports a lot of foreign oil and are dependent on it. Petroleum Institute tracking confirms the record breaking production of U.S. oil. We are not – as some politicians like to say – dependent on foreign oil. We are the Saudi Arabia of oil and natural gas.
“Drill baby drill” is not going to get you lower prices. The oil companies will just sell any excess overseas.
Next is the seasonal reformulation of gas. Why do gas prices increase every year when vacation season starts?
Hint, Biden didn’t do it. Every April and May, refineries shut down and purge their tanks to reformulate their gas blends to “summer grades,” which are cleaner burning in hot weather. The refinery purges and increased vacation driving is a collision course for higher prices usually occurring during this time.
According to Forbes, the U.S. is producing more gas and oil than any country on Earth. Why do some right-leaning TV and radio stations say otherwise? The finger pointing at the White House is a loser, because – as you can see from this research – there is little any one person can do to influence oil prices.
Lobbyists and politicians fiercely protect the tax perks and special laws that enhance oil company profits, which are across the board at record highs. Big oil is very generous to friendly politicians, no matter their political stripe.
Perhaps some day, citizens will get it that oil companies and politicians by proxy are gouging the public at the pump.
Wanted, politicians who represent us!
Lynne Stevens writes a bi-weekly column for The Graham Star. She can be reached via email, geminga@mailfence.com.