Why are gasoline prices high (and what can be done about it)?
Policymakers often blame high gasoline prices on oil company profits, collusion, or speculators, but knowing what really goes into the cost of gasoline is key to understanding what the government could do to lower prices.

Rob Green/Bergman Group

Article Highlights

  • 49% of consumers plan to reduce grocery spending if gas prices climb another 50 cents @KennethPGreen

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  • 58% of respondents disapproved of how #Obama has handled gas prices @KennethPGreen

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  • The average American household spends $3,348 of its after tax income on gasoline and diesel @KennethPGreen

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Once again, high gasoline prices are in the news. As of this writing, the national average gasoline price per gallon is hovering around $3.79. The public is unhappy with the high gas prices, and politicians are scrambling to find ways to either claim they’ve done all they could; to disclaim responsibility; to distract the conversation; or, as is often the case in a presidential campaign, to blame the other guy.

In addition to triggering off a gusher of newspaper editorials, the price pinch at the pump is sparking serious consumer discomfort. SymphonyIRI reports that “57 percent of consumers are feeling increased financial strain when gas prices increase, and more than four in ten say high gas prices make it difficult to meet monthly expenses,” based on polls conducted in the second quarter of 2011. Furthermore, 49 percent of consumers plan to reduce grocery spending if gas prices climb another 50 cents.

Reach the full article on American.com.

 

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About the Author

 

Kenneth P.
Green

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