NEEDED: A FREE MARKET FOR GASOLINE
February 9, 2006
Government restrictions, and not "greedy" oil companies, are at fault for the sharp spike in gas prices, says Congressman Ron Paul (Texas).
Oil is one of the most regulated industries in the United States. Regulations restrict refining, and tax rules discourage domestic oil production. In addition, a federal permit for a new refinery takes years of processing. These, and other restrictions, greatly inhibit the supply of gas, explains Paul.
This limited supply, coupled with a dramatic increase in demand from population growth, forces the price of gas higher. The solution is a free market for gasoline, says Paul. A free market will:
- Allow more competition and less government restrictions.
- Increase domestic exploration, drilling and refining.
- Reduce our dependence on the Organization of the Petroleum Exporting Countries (OPEC) by eliminating restrictions on other energy sources, such as coal, natural gas and nuclear power.
We can immediately and dramatically reduce the price of gas by abolishing U.S. restrictions on energy production and suspend the federal gas tax, which is almost 20 cents per gallon, says Paul.
According to economist George Reisman, our own domestic regulations make us slaves to OPEC: "Today, it is possible once again to bring about a dramatic fall in the price of oil ? indeed, one even larger than occurred in the 1980s....All that is necessary is to abolish the U.S. government's restrictions on domestic energy production inspired by the environmentalist movement."
Source: Ron Paul, "Needed: A Free Market for Gasoline," Oklahoma Council of Public Affairs, December 1, 2005.
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