Energy Secretary Bill Richardson estimates that American consumers face 20 percent or higher increases in heating oil bills. Richardson was reluctant to blame OPEC for this budding return to energy malaise. He cited instead market conditions. The Clinton administration would not release oil from the nation's Strategic Petroleum Reserve to help bring prices down. It cannot be treated so casually.
Oil is, in economic jargon, inelastic.
Consumers will pay what they have to pay to heat their homes, drive their cars and run their factories. The gap between low cost and high value makes petroleum a highly political resource. The power once lay with the multinational oil companies that provided consumers and governments in the industrial world with one of history's great subsidies by forcing oil producers to accept artificially low prices. It passed in the 1973 Arab oil embargo to the autocrats and dictators of OPEC, many of whom stole their nation's greatly increased revenues or spent them resisting the global trend to democracy. Collectively they squandered their pricing power in short order.