The Master may need to consider this one a little longer

I hate to write against my colleague here, but "The Master Speaks — Energy Policy" advocates such a monstrously bad idea that I must.

Why would it matter if we had a low price of oil if the gas price is set by the government? Any decrease in cost would only go into the pockets of the oil companies.

Let's be honest here. The only thing that keeps prices as low as they are is competition. Take that out, and prices will go up. If the price of gas will be $3 no matter what price the oil companies put on it, then the price they put on it will be $3. You think that they would care (or should care) that the government wouldn't get their taxes?

Furthermore, all price fixing weakens the economy. If it is fixed too high, there will be a surplus. Fixed too low, and there will be a shortage.

And what will happen to premium blends? Can the price of supreme unleaded be higher than $3? If not, then it will disappear, since the gas companies can make more money off regular unleaded (which costs less to produce). Then the government will have to come in and force the oil companies to make supreme. The new bureaucracy will cause the government to increase the price to $3.50, since they aren't making but two pennies a gallon (rather than 46 cents) on the $3 price. Gas companies will raise their own prices, and so on.

And if you think this wouldn't happen, then try to think of the last time government decided to not raise taxes.

The solution here is more competition, not less. I hate to speak against the Master here, but I wouldn't if he had been right.

-Paul Lytle,
Primum Mobile Magazine

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