No new refinery has been built in this country in more than 20 years. Clean air regulations have produced 15 different types of gasoline because of varying state requirements. Instead of producing one type of fuel for every state, refineries must tailor-make 15 different types, adding to their costs. California Democratic Governor Gray Davis is trying to convince President Bush to adopt an inappropriate public policy by lobbying him to impose a temporary cap on wholesale electricity prices in California. Price controls on fuel have been imposed before by Republican and Democratic presidents.
Many factors contribute to energy price variations.
In fact, major reasons for increased costs include explosions and fires that have affected pipelines and refineries, as well as the unique formulation of gasoline the state requires. As Consumers' Research reports, Midwest gas price hikes were partially caused by problems supplying a new, cleaner-burning gasoline that complies with Environmental Protection Agency standards and also meets the objectives of state and local governments to promote the use of ethanol as an additive. Aggravated pipeline problems and low inventories also helped drive prices up in the region. Competition will help drive prices down. Costco and Wal-Mart are two major chains that have recently decided to sell gasoline at lower prices.