The price of crude oil is about to hit $200 a barrel which will soon push gas prices up to $7.00 a gallon at the pump. If nothing is done to reverse this maddening trend, we will soon be working just to fill our tanks, forced to choose between buying gas to go to work and feeding our children. That’s why we have to take action. I believe the time has come for the federal government to impose a ceiling on the price of gasoline.
The price of crude oil is about to hit $200 a barrel which will soon push gas prices up to $7.00 a gallon at the pump. If nothing is done to reverse this maddening trend, we will soon be working just to fill our tanks, forced to choose between buying gas to go to work and feeding our children. That’s why we have to take action. I believe the time has come for the federal government to impose a ceiling on the price of gasoline.
The market forces that fuel the fast rise in gas prices are also driving hard-working citizens into poverty. As gas went from an average of $1.31 in 2002 to $3.75 ($4.00 in Illinois) according to GasBuddy.com, a gas price watchdog, the monthly gas expense grew from $80.00 to $200.00. And when prices hit the $7.00 a gallon mark, the average monthly gasoline bill will approach $400.00. Faced with this ever increasing financial burden, many families are forced to cut their budgets for food, medication, utilities, and even debt repayments. As this trend continues, people will have to make hard choices like postponing a child visit to the doctor’s office, giving children unhealthy food, skipping a dose of important medication, deferring a utility payment, or defaulting on credit card and other debt repayments, just to keep a tank full of gas on which to go to work.
Such a climate is ripe for price controls on gasoline. It will soon become politically untenable for the government to take no measures to ease our pain at the pump. Yet the government has very few, if any, viable alternatives to price controls. An idea like the much debated gas tax holiday is universally viewed as nothing more than a political gimmick that will not curb the rise in gas prices and might even drive those prices much higher. The windfall tax on oil profits is another commonly floated solution. But it also calls for reinvesting the money in developing alternative sources of energy which promise to curb our appetite for oil in the long-run while ignoring our current pain at the pump.
In contrast to those competing policy proposals, price controls tackle head on the issue of our pain at the pump. Congress merely has to pass and the President merely has to sign a bill limiting the price of gasoline in the United States to a maximum of $3.00 a gallon. Such a measure would immediately reduce the average monthly gasoline bill by $50.00.
There are a few drawbacks to price controls. Some critics argue that price controls on gasoline will result in inordinate increase in the retail price of diesel fuel, kerosene, heating oil, and other derivatives of crude oil. Such an increase, they argue, would spark a rise in the prices of groceries, clothing, appliances and others goods. This line of thought is basically correct, but the government can prevent the feared effect by imposing price controls on all major oil derivatives. Some detractors of price controls also point out that artificially low gas prices would discourage energy conservation efforts, motivate people to drive more, and ultimately boost demand for oil, causing the price of crude oil to soar. These latter critics are correct for the most part. But if this situation occurs, the government could respond by raising the price ceiling for gasoline to a more appropriate level. The point is none of these drawbacks outweigh the benefits of easing our pain at the pump through tough price controls.
In order to embark in such an ambitious program as the implementation of price controls on gasoline, the government needs to receive a popular mandate so they can withstand the formidable pressure to be exerted by oil company lobbyists and executives. We all understand that oil companies from producers, to refineries, to distributors will fight and seek to defeat the very notion of price controls. They might even win if the government is not pressured with greater force by us, the public. That’s where you come in.
We must launch a Campaign for Price Controls on Gasoline. As part of the campaign, we will bombard our elected officials US Senators, Representatives, the President and his aides with letters and phone calls demanding the immediate imposition of price controls on gasoline. We will also encourage our neighbors and friends to join the campaign by e-mailing this message to as many people as possible.
For more information or support please email us at lcmessi@sbcglobal.net.
(1) Leon Messi is the Coordinator of the Campaign for Price Controls on Gasoline. He can be reached at lcmessi@sbcglobal.net .