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<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., March 10, 2004—With gasoline reaching over $2 a gallon in some cities across the country, many Americans are asking themselves what is responsible for the sharp rise in prices in recent weeks. Given that the increase is occurring so long before the usual price hikes of the summer vacation season, drivers are growing nervous about the tab they’ll be facing to fill their tanks when summer finally does arrive.
While many analysts have placed the blame on high oil prices caused by OPEC production quotas and political turmoil in Venezuela, some of the blame also lies with the government itself. Unbeknownst to most Americans, the federal government’s web of rules regulating “boutique” gasoline blends has made it much more difficult to produce the affordable gas and diesel consumers have come to expect. Special blends of “reformulated” gasoline, new low sulfur requirements, and many other regulations have made refining an increasingly expensive business, especially in the summer months when the rules are even tighter.
“While the price of oil bounces up and down over time and gasoline taxes remain steady, the costs of federal and state fuel regulations are going nowhere but up, causing many recent price jumps,” said Competitive Enterprise Institute Director of Air Quality Policy Ben Lieberman. “The new low sulfur requirements are part of the growing list of gas regulations, each compounding the cost of producing motor fuels. Unless governments at all levels decide to streamline this burden, the next few years promise plenty more pain at the pumps.”
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Director of Air Quality Policy
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