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Tuesday, January 02, 2007

Evidence that Big Oil manipulated gasoline prices to try to affect the November election
Posted by Jill | 10:19 PM
Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, on NPR's Marketplace:

Say you're an oil executive and you want to keep the Republicans in control of Congress. What can you do prior to an election?

Well, you can keep your refineries running at full speed, flood the market with extra fuel, and take less per gallon in profit than usual.

And guess what: Department of Energy data suggest that's exactly what the oil companies did this fall.

By the second week in October, gasoline prices fell 70 cents from summer's record highs. Refineries were running full throttle and America's gasoline inventories were up nearly 7 percent from the three previous Octobers.

The rise in supply came despite BP's major pipeline disruption in Alaska. Ordinarily, that's an industry excuse to shrink supplies and raise prices.

Now, the oil industry claimed pump prices fell because crude oil prices dropped.

But gas prices dropped far more steeply than crude oil. Crude oil comes in barrels. There are 42 gallons in a barrel and the price of each gallon was down 10 cents this October over last. But gas prices fell 61 cents a gallon over the same time last year.

In other words, in the run-up to the election, oil companies cut gasoline prices 500 percent more than their raw material cost fell. And it wasn't because refining and distribution costs rose. They're relatively stable.

Oil companies simply took less profit from their refineries for a short period of time. Could it have been to influence a political outcome?

Well, right after election day, the price of gas suddenly rose after two months of sharp decline. Post-election, refineries have slowed down, inventories are shrinking, and gas prices are climbing.

It's back to business as usual, unless the new Congress starts to do business differently.


Watch for the oil companies to punish you this winter for having the nerve to vote Democratic.
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