There is a lot of whining going on about the price of gasoline. Politicians are seeing a conspiricy and threatening to regulate something. Here is a fact sheet from the API showing where the money goes:
Three Thoughts:
- Price is a signal that something needs to change. The government supresses that signal at its peril. Think about rent control. In this case if we want more supply the price has to rise which will also decrease demand.
- Gasoline even at the high prices we now have is still only the third most expensive thing about owning a car for most people. First is the cost of the car amortized, second is insurance and third is gasoline.
- If politicians are serious about lowering the cost of gasoline they should let us drill for it in Alaska, Florida and off the coast of Santa Barbara.