Friday, August 31, 2007
Posted by D. Daniel Sokol
Yesterday the FTC and DOJ released the their Report On Spring/Summer 2006 Nationwide Gasoline Price Increases. In what is perhaps a shock to nobody (except those in Congress), it turns out that prices are a function of supply and demand. In particular the report lists six factors for the price increases:
(1) seasonal effects of the summer driving season; (2) increases in the price of crude oil; (3) increases in the price of ethanol; (4) capacity reductions stemming from refiners’ transition from the fuel additive methyl tertiary-butyl ether to ethanol; (5) refinery outages resulting from hurricane damage, other unexpected problems or external events, and required maintenance; and (6) increased consumer demand for gasoline beyond the seasonal effects of the summer driving season.