From my commentary in today's Detroit Free Press "Don't Buy Into Myth on Price Gouging:"
People assume that oil companies control gasoline prices, but the economic reality is that they don't. Even the biggest oil companies don't set prices for gasoline, diesel or jet fuel, any more than farmers set the price of corn, soybeans or milk. Oil prices, like prices for all world commodities, are set by competitive international market forces.
And yet oil companies are constantly accused by politicians of "price gouging," and a House Energy and Commerce subcommittee is pushing for federal regulation of oil prices that would end up harming U.S. consumers and increasing our dependence on foreign oil.
There is a great deal to be gained by allowing market forces to drive down gasoline prices when there are supply disruptions, and a lot to be lost if we foolishly enact price gouging legislation.
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