By State Representative, Leon D. Young
Leon D. Young
If you are like me, you probably have noticed the rapidly falling gas prices — as of late. It wasn’t that long ago that several articles appeared in the media that talked about the “price disconnect” between crude oil prices and the cost at the pump.
The articles made the point that we were paying $4 for a gallon of gasoline back in 2008; crude oil was selling for an all-time high of more than $145 a barrel. Fast forward to early September, oil was selling for only about $87 a barrel, but the average price of gasoline was still $3.76. Why?
According to oil market pros, there were a sundry of reasons for this obvious price discrepancy. The first rationale given was the global energy demand that continues to accelerate. This has led to an increase in the exporting of finished gasoline, especially to Latin America. The second explanation was a series of refinery disruptions throughout the Midwest that have tightened supplies, sending gas prices higher. And last, but not least, the assertion (real or imagined) that the price of crude oil is no longer an accurate benchmark or indicator as the link between prices at the pump and the price of crude.
In my view, the whole oil industry is far too murky and convoluted. It had been theorized that the ouster of Colonel Muammar al-Qaddahi in Libya and the dreadful economy would translate into lower retail gas prices for consumers.
With that being said, what one pays at the pump is essentially a crap shoot. There something seriously wrong with these two lasting images of the oil industry. First, Exxon-Mobil made $11 billion in quarterly profits back in May; and, in 2008, reaped the largest annual profit ($45 billion) of any company in U.S. history. Second, U.S. oil companies continue to export more finished gasoline products to Latin America, where they can make even higher profits.
This sounds like old-fashion price gouging and greed to me.