The Real Reason
I was listening to NPR on my way home yesterday, and I heard a story about the rising gas prices in the Chicagoland area. We have the honor of paying the highest price for gas in the nation, a distinction we will gladly hand off to whomever steps forward. Right now, while the national average is at $3.18, our local average is reportedly $3.59.
In this news story, announcing our ascension to the top spot nationwide, mention was made of rumblings about Congressional action to curtail record profits by large oil companies. In giving equal time to the other side, the reporter had recorded a statement from a representative of the Illinois Petroleum Council.
I don’t have access to the exact quote, but the gist of his statement was the following: state and local taxes are the real reason gas prices are so high.
I nearly drove off the road.
I’m not angry that the man said it: that’s what he’s paid to do, go out to the media and lie his ass off. I’m not upset that the radio station aired it: that’s what they do, put the lies of big-business spin-meisters on the air in response to accusations that their employers are pillaging the American public.
I’m upset that people will believe it.
Let’s do the math, shall we? The report indicated that Illinois and Chicago taxes are high as compared to the national average. Combined, the two taxes currently total $0.77 per gallon. That, by the way, is a percentage that is dependent on the underlying wholesale price of gasoline. So when the wholesale price of gas goes up, the tax goes up proportionately. The result is that for every penny the wholesale price of gas goes up, the price consumers pay goes up one penny plus X percent.
So if there were no tax, would gas be cheaper? Sure. If there were no tax, would gas prices continue to fluctuate? Absolutely. This dirtbag is going on the radio at the direction of companies whose shareholders are taking baths in gold bullion right now, trying to redirect public complaints away from the people who are actually at fault for this calamity.
Let’s make sure, in the midst of my grousing, that we cover the real reason for the high price of gas: supply and demand.
Wait, you say, how does that make the oil companies guilty of cranking up the price? Because the oil companies have intentionally put a choke-hold on the refinery, storage capacity and distribution channels that supply the country with automobile-ready gasoline.
The price of a barrel of oil has actually been in a reasonably narrow trading range for the last year or so, in the neighborhood of $60 to $65 per barrel. The infrastructure that takes that oil and produces gasoline has been reduced by the oil companies in order to drive up prices. So the supply goes down, the summer driving season means demand goes up, and next thing you know you’re paying $4.00 per gallon. Believe it, by June 30, we will have seen it already. You heard it here first.
How do they do this? Those of you who have the time and wherewithal, go do some research. You will find that over the last 5 - 10 years there has been a discernable pattern of accidents at gas refinery, storage and transport facilities. These accidents all have a number of curious similarities: nobody gets killed, or even injured; repair of the damage takes months or even years; and the capacity of the whatever-it-is is reduced significantly or eliminated completely. Interesting, isn’t it, that these accidents all have the same characteristics? It’s almost as if somebody planned it that way…
But why would an oil company intentionally blow up its own refinery? Two reasons. First, they don’t have to pay for needed equipment upgrades, the repairs are covered by insurance. So they get some shiny new pipes and valves for free. And second, because the news of the reduced refining/storage/transportation capacity causes panic on the trading floor, the price of wholesale gas shoots skyward as soon as the markets open. So the oil company who owns the facility doesn’t have to spend a penny on repairs, and they merely ramp up production on their other facilities to take advantage of the price increase. See how this works now?
The part that you don’t see, and nobody can confirm (but we all know happens), is the chairmen and board members of these oil companies sipping Scotch in walnut-paneled rooms, lighting cigars with $100 bills, and drawing straws to decide who has the “accident” next year.
So don’t fall for the garbage you hear on the news about taxes, or environmental regulation, or EPA compliance, or unscheduled maintenance, or any of the other lies the oil companies try to tell you. This spike in prices, like all of the others, is directly linked to actions taken by the oil companies themselves. In other words, they’re picking your pocket, and lying to cover it up. Remember that the next time you pay $60 to fill up your tank, as I did just this morning.










