The federal agency that tracks energy prices is predicting record annual gasoline prices for 2011–$3.56 per gallon on average for the full year, higher than the economy-wrecking $3.35 per gallon average price of 2008. The prediction should cause some neck-whipping at the White House and Federal Reserve. It might even get energy and financial regulators off their tushes to approve regulations that will curb market speculation.
The Energy Information Administration put out its projection Wednesday without noting that it would be a record, perhaps hoping they’d be proved wrong. After all, today’s guess was a 40-cents-a-gallon jump from the agency’s prediction a month ago. But the writer seemed to think that if anything it would be proved too low:
There is also significant uncertainty surrounding the forecast, with the current market prices of futures and options contracts for gasoline suggesting a 25-percent probability that the national monthly average retail price for regular gasoline could exceed $4.00 per gallon during summer 2011. Rising crude oil prices are the primary reason for higher retail prices, but higher refining margins are also expected to be a contributing factor.
So not only are we paying more to the oil companies and the speculators, refineries will be taking more of our hide as well. Of course, California is already brushing the $4.00 mark and could hit $5.00.
Can’t anybody do anything about it? Sure. The White House, regulators, Congress and state Legislatures could do a lot. But first they have to get their necks out from under the boots of corporate lobbyists.
To find out more, check Oil Watchdog’s plan for cutting the speculation tax and the greed fee out of our fuel prices.