Fueling Misunderstanding about the Oil Market

Diane Katz / March 11, 2011

With gasoline prices at a two-year high, President Barack Obama today called for a crackdown on “price gouging” at the pump. Some consumers may feel relief to hear that the White House intends to protect them from supposedly unscrupulous suppliers. But the President’s energy policies are a lot more to blame for the current high prices than any market manipulation. And to the extent his “price gouging” rhetoric persists, the rise in oil prices could worsen.

Oil prices have spiked some 22 percent in the past year, amid rising demand from China and India, political unrest across the Middle East and North Africa, and inadequate refining capacity worldwide. But as documented in a recent Heritage Foundation report, the Obama Administration’s policies on domestic oil drilling and alternative energy also are driving prices higher and, therefore, inhibiting economic recovery. (more…)