Oil companies have been part of the campaign to make voters aware that gas prices will increase in January once fuels are put under the cap-and-trade provisions of AB 32, the Global Warming Solutions Act. Yet, a strange thing is occurring. The campaign to delay the application of cap and trade rules for fuels goes on as gas prices continue to fall in California. If oil companies really can manipulate increases in gas prices, as critics have charged for a long time, wouldn’t now be the time to keep prices high to help their campaign?
Governor Jerry Brown defended the implementation of the cap and trade rules for fuels in his speech on climate change earlier this week at the United Nations. Brown noted the dropping fuel prices. “Luckily the price of oil has been coming down ever since those ads went on the air just a month or so ago.” Brown said.
As of the latest statistics from a few days ago, self-serve gasoline prices in Los Angeles County, for example, have hit their lowest point since Valentine’s Day. The latest stats showed that prices have dropped 69 of the past 75 days.
Critics constantly complain that the oil companies are “greedy” and that they manipulate prices to bring in ever bigger profits. If that is so then wouldn’t now be the time to jack up those gas prices? Keep them high and continue the clarion call that prices will go even higher once the cap and trade rules kick in? Many analysts, including those working for government agencies, say the cap and trade rules will increase the cost of gasoline at least 14-cents a gallon or more.
If oil companies aren’t manipulating the prices now when it would help their argument that surely indicates the accusations against the oil companies are misguided, wrong, a misunderstanding, or a bunch of hooey – you pick the appropriate descriptor. The truth is, for the most part, the market sets the price.
The market and any fees and taxes and mandates from government. That latter lesson will undoubtedly be on display in January if cap and trade on fuels is implemented.