As Tropical Storm Isaacs raced through the Gulf of Mexico on its way to the southeastern United States late last week, the price of gasoline soared even faster. And not just in that region.
Gas across America was up at least a nickel a gallon. In this corner of the country — more than 3,000 miles away — Walla Walla saw gains of a dime or more.
Big Oil was boosting the price of its product because of concern the storm might slow production.
The gasoline sold this Labor Day Weekend was produced long before the storm started heading ashore. The actual supply of oil and gasoline hasn’t been diminished by even one drop because of the storm. Yet, the price took off in one day.
The story doesn’t hold water — or oil.
It’s clear (at least to us) that Big Oil saw an easy opportunity to make a lot of quick cash heading into a three-day travel weekend. The storm story provides just enough political cover to keep Congress from putting heat on oil company executives. In addition, congressional leaders of both parties are now so fixated on their respective political conventions they aren’t in a position to take action.
If the situation were reversed, and the storm were to suddenly change course out to sea, it would take weeks before that was reflected in the price at the pump.
Consumers are being gouged this weekend. This has got to stop. The constant sharp spikes followed by slow declines is a major reason the economic recovery continues to sputter.
Gasoline is essential to our nation’s economy and the everyday lives of Americans. It is just as important as electricity and natural gas.
Yet, the price of electricity and natural gas is essentially regulated by the government. Heck, even cable television and phone services have some government oversight.
Why not gasoline?
The oil business is an oligopoly. A few giant companies control the market. This lock on the market curbs competition because it is easy for the oil companies to engage in de facto collusion to establish prices higher than they would be in a truly competitive market.
What’s needed is oversight and regulation of energy commodities. This move that should bring stability to gasoline prices.
Congress isn’t yet ready to take this step, but a few more Tropical Storm Isaacs situations — and an economy that remains on life support — could motivate lawmakers to take action. That is long overdue.