Demagogues and Leftist Whiners Pay Attention!

The Battle Over the Blame for Gas Prices
Firms Cite Supply Issues, Deny Abuse

By Steven Mufson
Washington Post Staff Writer
Friday, April 21, 2006; Page A01

When Severin Borenstein drove by a Shell station in Orinda, Calif., yesterday morning, the price of unleaded gasoline was $2.99 a gallon. When he drove by five hours later, the price was $3.10 a gallon.

Borenstein has a better grasp of why that happened than most. He's a professor of business and public policy at the University of California at Berkeley and is director of the University of California Energy Institute.

"The oil side is one piece of this. The refining side is another piece of this," he said.

Oil prices are soaring, with the price of crude at more than $70 a barrel on world markets and 37 percent higher than a year ago. That works out to more than $1.7o a gallon, more than half the cost of a gallon of regular unleaded gasoline.

The next biggest chunk of the cost of a gallon of gasoline is the cost of refining, which is now about twice the average levels over the past five years. And that has sparked controversy over whether oil refiners have been gouging consumers by holding back on expanding capacity to gain more power over prices.

The oil companies deny those allegations, but what's not in dispute is what's happening at the gasoline pumps.

"What's going on is just a continued reflection of the worsening supply-and-demand balance, and when you get into a tight market, small changes can cause big price movements," said Borenstein, explaining the rising price of crude oil.

He added that the reasons for fatter refining margins were not so clear. "This is the time of year when that number always goes up, but it has gone up more than usual," Borenstein said. "What we're seeing is that refineries are making huge profits. We have not been building refineries, demand continues to grow, and supply is not keeping up with it."

For most consumers, the high prices have been a bit of a puzzle. When oil prices spiked last year, many of the reasons seemed temporary: hurricane damage in the Gulf of Mexico and unusually low inventories of crude oil and gasoline. This year, inventories have mostly been rising since January and hurricane season is still months away. (Yesterday, the American Petroleum Institute said crude oil inventories dipped slightly but still stood 6.7 percent higher than the year before while gasoline stocks fell to 4 percent below the level a year earlier.)

In the absence of a clear explanation, members of Congress have jumped into the fray. "These major oil companies have hooked their hose up to the pocketbooks of American citizens and are sucking money from ordinary Americans into the treasury of the giant oil companies," said Sen. Byron L. Dorgan (D-N.D.), a member of both the Senate Commerce and Energy committees. Sen. Charles E. Schumer (D-N.Y.) on Tuesday called on the Federal Trade Commission to make sure the major oil companies weren't intentionally keeping refinery capacity offline to jack up prices. He cited a 5-percentage-point decline in refinery utilization rates.

But the American Petroleum Institute responded sharply. "Any charge that oil companies are intentionally driving up prices ignores the very obvious fact that refinery capacity has been lower because the industry is still in the process of recovering from the extensive damage caused by Hurricanes Katrina and Rita last summer," the API said in a statement. "It is a fact that three refineries remain closed since the hurricanes. The combined capacity of those refineries is 804,000 barrels per day -- or about 5 percent of U.S. refinery capacity, the same amount Senator Schumer mentions."

One indication of the Gulf of Mexico refinery problems was the price of gasoline, which is usually cheaper there than on the East Coast. Currently, the price of gasoline is running about 15 cents a gallon more in the Gulf region.

Okay O'Reilly and Schumer and the rest of you demagogues try, just try and get your simple little minds around the facts for once. Read the entire article (I am not permitted to post the entire article here, but you can follow the link below) and try to understand.

Oil is a commodity. Its price is controlled by the markets, not by "Big Oil." The average profit made by the oil companies on a gallon of gasoline is 8%. For those of you who can't do higher math, that's 24 cents/gallon. On the other hand Chuck Schumer, Byron Dorgan, and the rest of your government is getting 50 cents in taxes off of each gallon you buy. You tell me, "Who's gouging the customer?" Don't believe me? Check this out from the pages of this very Washinton Post.

As you can plainly see, we Americans could have an immediate drop in the price of gasoline of 50 cents/gallon if Congress would just withdraw their greedy little piggy snouts from the oil trough. I doubt very seriously if those on the Left would agree to such a measure. Why, look at all the environmental research that would have to be terminated or at least severely cut back if that were to happen.

I mean old "Microphone Moth" Schumer is whining about 5%...5%, is he kidding...5%? That's one tenth of what the government is sucking out of the consumers pocket. My God people are you so gullible that you believe these liars? Do a Google on Gas Prices and the first article listed this morning, in the New York Times, is titled "Democrats Eager to Exploit Anger Over Gas Prices."

They don't care about the American people or the hardship they're imposing on them. For them it's a game. It's all about power and politics. They couldn't give a Rat's A__ about you. The oil companies care more about your welfare than they do, if only out of a selfish profit motive...push too high, too quickly, and you alienate the customers. Ask too much for your product, and the small operators will step in and undercut you. It's only good business sense.

Wake up America and quit buying these Demagogue's lies.

Full Story: Democrat-Demagogue, What's the Difference?

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