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Oil
Price-Gouging Bill Points Finger In Wrong Direction
March 15, 2006 — By the National Center for Policy Analysis
DALLAS, TX — The Senate Judiciary Committee will hear testimony today on
the Petroleum Industry Antitrust Act of 2006, introduced by committee
chairman Sen. Arlen Specter (R-Pa.). National Center for Policy Analysis
(NCPA) Senior Fellow H. Sterling Burnett calls the bill an unneeded
regulation designed to divert attention from the real reason behind oil
price increases - Congress.
"Oil company collusion is not a factor in the current price of gas,"
said Burnett. "Oil companies are the mercy of the global market in
energy just as much as anyone else."
According to Burnett, a combination of factors caused the current peak
in gasoline prices:
- Strong demand in the U.S. and several developing nations;
- OPEC production and refining decisions;
- Political instabilities in a number of oil-exporting countries;
and
- Further damage to off-shore oil platforms and gulf coast ports, as
well as refineries and delivery systems from Hurricanes Katrina and
Rita.
Sen. Specter's bill places restrictions on future petroleum industry
mergers, allows the U.S. Attorney General to sue OPEC for colluding to
increase prices, and makes it illegal for anyone to withhold oil
unilaterally in order to raise prices or create market shortages.
However, profits in the oil and gas industry are much lower than many
industrial sectors, such as pharmaceuticals, banks, semiconductors, and
even household and personal products. Further, state and federal taxes
account for a larger portion of the price of gasoline than do oil
company profits.
"If Congress really wants to reduce the price of gasoline, then it
should look inward," said Burnett. "They contributed significantly to
the current high prices by placing tens of billions of barrels of oil
and gas on public lands in Alaska, including the Arctic National
Wildlife Refuge, the Western U.S. and on the outer continental shelf off
limits to exploration and production."
The NCPA is an internationally known nonprofit, nonpartisan research
institute with offices in Dallas and Washington, D. C. that advocates
private solutions to public policy problems. We depend on the
contributions of individuals, corporations and foundations that share
our mission. The NCPA accepts no government grants.
Contact Info:
Dorene Englert
Tel : 972-308-6459
E-mail :
dorene.englert@ncpa.org
Website :
the National Center for Policy Analysis
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