I know some of you are going to disagree with me on this but I do believe that the oil companies are engaging in price gouging. Consider the fact that gas was around $1.80 a year ago. Now its been around $3.00 and in some cases higher in certain parts of the country. The price also went up between 50-80% percent in one week. Now if thats not price gouging I dont know what it is. This is an important policy debate because the price of fuel drives up the cost of almost everything we buy. Transportation is a critical part of our economy because they deliver the goods.
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I'm not sure what's going on. Oil refineries, for reasons unknown to me, are always running at full capacity. Some refineries have been shut down by Katrina and so there is a slowdown in supply. I find it incredible that there are such slim margins, that losing 5% production can spike the market, but it seems to be the case. What amazes me is that oil was around $24 in 2000. That is $40 less than today, and we still do not have meaningful conservation and renewable energy goals.
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