In a recent letter (March 17) James Bilancia refers to remarks by Sen. Angus King on the rise in gas prices and concludes that, in addition to supply constraints, the increase “is also due to sheer price gouging by big oil companies amid the rapid recovery of jobs and wages.”
In his comments on the Senate floor, Sen. King does not say a word about price gouging. He makes some misleading and largely irrelevant remarks about the Keystone Pipeline, oil exports and undrilled oil leases, but also says, correctly, “The truth is, the price of gas depends upon the price of oil, and the price of oil depends on the world market, and the price of oil on the world market depends upon supply and demand.” Exactly.
As an example of the point, the U.S. Energy Information Administration reports that U.S. crude oil inventories are about 12 percent below the five-year average for this time of year. And the International Energy Agency reports that energy markets face the biggest crisis in decades unless producers like OPEC offset the decline in supply.
There is no credible evidence that price gouging has anything to do with current energy prices.
Martin Jones
Freeport
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