Gasoline prices hit record levels Thursday, marking the 22nd consective day of new all-time highs, according to AAA. The average price has passed the $4 a gallon mark in 11 states and Washington, D.C., and reached $3.95 for a gallon of regular unleaded nationwide—up eight-tenths of a cent from a day earlier and nearly 10 percent from a month ago. (CNN)
What the commentators said
If you want to know who to blame for $4-a-gallon gas, said John Dillin in The Christian Science Monitor, look in the mirror. The 1970s energy crisis shocked us into conserving, and the average fuel economy for new cars and light trucks in the U.S. jumped from 13.1 mpg in 1975 to 22 mpg in 1987. Then we sank back into our bad habits, and now we’re paying the price.
It's not that simple, said Andrew Leonard in Salon. In "a single gallon of gas," which costs $4.09, 66 cents go to taxes, 19 cents to refineries (down from 48 cents in late March), and just a nickel to distributors. That leaves about $3.19 for the price of crude oil, and Exxon doesn't set that price; traders do.
Sure, some of the blame goes to investors, said Thomas E. Nugent in National Review Online. Academics said commodities were a "good portfolio diversifier," and speculators started bidding up oil prices. "But the true culprits are located in Washington, D.C.," where Democrats who promised cheaper fuel instead are blocking us from tapping our wealth of oil-shale, as well as Alaskan and offshore oil.
“Americans should be celebrating rather than shuddering over the arrival of $4-a-gallon gasoline,” said Chris Pummer in MarketWatch. “We lived on cheap gas too long, failed to innovate and now face the consequences of competing for a finite resource amid fast-expanding global demand.” If oil climbs to $200 a barrel, and we start paying $8 a gallon for gas, as Europeans do, the pain at the pump will be excruciating, but we’ll finally “jumpstart the overdue process of weaning ourselves off fossil fuels.”
Don’t bet on it, said James Pethokoukis in U.S. News & World Report’s Capital Commerce blog. “The ‘oil is in a bubble’ meme is gaining strength,” and there are plenty of reasons to believe “the hysteria may be ready to wane.” High fuel prices have prompted Americans to start driving less, easing demand, and everyone from Russia to the U.S. is looking for ways to boost output, so the run-up in oil prices could soon be over.