Despite Supply Glut, Consumers Face Soaring Gasoline Prices, New Report Finds (PDF; 121 KB)
Source: Consumer Federation of America

Despite declining gasoline consumption, high inventory levels and increased production of ethanol, America’s gasoline consumers continue to face escalating prices at the pump, according to a new report released today by the Consumer Federation of America (CFA).
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According to the report:

• If oil stays around $100 per barrel and refiners cut their production runs to increase their margins, consumers could see gasoline increase as much as $0.75 per gallon or more in the coming weeks before the Memorial holiday weekend.
• Contrary to the past several years, there is plenty of gasoline available, demand has fallen, and increased amounts of less expensive ethanol is being blended into more than 60 percent of the nation’s gasoline.
• Refiners, in an effort to pass through higher crude costs and increase their margins (and profits) are extending maintenance operations and cutting refining runs to reduce the gasoline surplus.
• Since 2002, oil companies have earned excessive profits, above the normal return on equity earned by all manufacturing, of over $190 billion in after tax dollars.
• The Federal Trade Commission and others have documented oil industry efforts to consolidate the market and cut excess capacity which keeps gasoline supplies tight and prices high.
• The recent modest decline in crude oil prices is not likely to bring relief to consumers if oil refiners succeed in cutting gasoline production.

+ Rising Gasoline Prices: Why Can’t Consumers Catch a Break? (PDF; 333 KB)

This entry was posted on Wednesday, March 26th, 2008 at 6:36 pm and is filed under Business and economics, Consumer issues, Documents in the news, Energy. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.