Monday, June 05, 2006
Federal laxness at controlling mergers allows oil companies to consolidate. Consolidation breeds oligopoly, in which a pseudo-"free market" composed of a handful of monster companies form a joint monopoly among themselves. Without competition, refineries can limit the supply of gasoline as they choose, and still squeeze the consumer. Federal laws that allow variances in gasoline regulations from state to state, and between town and country, inhibit interstate commerce in gasoline and further reduce the number of competitors in local markets. This enhances the power of the oil oligopoly and drives up prices even more. We ask, Why not impose the same gasoline regulations nationwide, and therefore increase the number of suppliers able to sell gas in any one place? Come to think of it, why should we allow bad gas - substandard air-polluting gas - to be sold anywhere? Force all gasoline manufactured in the U.S.A. to meet the same standards, and ultimately our gas may be both cleaner and cheaper.
"Pumped Up" from The New Yorker