Profits for oil companies account for much of the price tag for gas at the pump. One year ago, when gas prices were through the roof, Exxon Mobil recorded its highest-ever quarterly profits. Oil barrel prices were $125, double the previous year. This is explained by scarcity, but when reserves are higher than ever I’m not convinced. Gas would be cheaper if there were more restrictions on gouging by the companies that sell it to consumers. Common sense suggests that even in this green-conscious time people will drive more when gas is cheaper, so it would be a low-blow to the environment if prices dropped too much.
One proposed solution is to have a gas tax holiday. Currently, state gas taxes average about 47 cents on the gallon. Removing the tax would pull down the prices on gas. Another way would be to increase global supply of oil production. High gas prices is the reason many groups advocate renewed drilling in offshore oil rigs in America. Producing more of our own gas supply would allow consumers to pay less at the pump. Unfortunately, falling gas prices may only feed our dependence on oil, accelerate demand growth, ultimately pushing up gas prices anyway.
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