Last week, oil prices were at a two-month low of less than $100 per barrel, but in many parts of the country prices at the gas pump remained painfully high.
You don’t have to be an ecomonic genius to conclude that if oil prices are falling, gas prices should follow suit, but that’s not always what happens in a system where oil companies seem to be able to set their own prices.
Ensuring that oil and gas prices are positively associated in the future is the chore of a new Department of Justice task force organized by Attorney General Eric Holder.
Late last month, Holder announced the formation of the Financial Fraud Enforcement Task Force Working Group to focus specifically on fraud in the energy markets.
According to the DOJ, the Oil and Gas Price Fraud Working Group will monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.
The Working Group will also evaluate developments in commodities markets and examine investor practices, supply and demand factors and the role of speculators and index traders in oil futures markets.
Too Little, Too late?
A new report by the Consumer Federation of America found U.S. households will spend an average of nearly $3,100 on gasoline in 2011, up from $2,000 in 2009.
The study, which surveyed 2,000 American households found that very large majorities (85 percent) are concerned about gas prices, think it important to reduce oil consumption (87 percent) and believe it important to increase fuel economy standards (75 percent).
“Pain at the pump, along with the country’s oil import dependence, has produced a growing consensus that the federal government should substantially increase fuel economy standards. And among independent technical experts, there is a growing consensus that committed car companies could meet these higher standards.”
Some are applauding President Obama’s recent decision to expand domestic offshore drilling as a solution to America’s dependence on foreign oil.
Despite Republican claims that current restrictions on offshore drilling were to blame for high fuel prices and the loss of American lucrative jobs, however, the new policies will not have an immediate effect on supply or prices, nor would they quickly open any new areas to drilling.
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