The price of oil has dropped to under $34/barrel. Even with the cheap oil the price of gas in eastern Iowa is over $1.80 per gallon.
The reason? Refineries have restricted the production of gasoline. There are only a handful of refineries in the US. Take a few offline and the price will spike. Enron taught refiners a lesson: If we work together we can all make more money.
This month refinery A goes offline. Next month it's refinery B. Next month refinery C. The ones that remain in production make much, much better profit margins. The companies have no problem allowing a plant to shut down because they know they will more than make up the profit next month.
It's an econ 101 lesson: An oligopoly working together has the power of a monopoly.
Can it be fought nationally?! That's horse****. I'd much rather pay higher taxes on gasoline than know my profits are going to CEOs at oil refineries...
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