Tuesday, May 13, 2014

Old Laws Contributing to New Increase in Gasoline Prices

Gasoline pump prices have been inching steadily upwards and are now the highest they've been in over 14 months.  Many find this surprising given the apparent abundance of US crude oil currently; but as Cato Institute's Scott Lincicome explains, old bureaucratic regulations and laws designed as protectionist measures bear much of the blame for the current rise in prices:
Thus, the Jones Act and the crude oil export ban – each implemented decades ago – together inflate U.S. gasoline prices by as much as 0.22 per gallon – or about 6% of the current price at your local gas station.  Not everyone in the United States, however, is harmed.  In the case of the Jones Act, the American shipping unions and shipbuilders that benefit from the law have long opposed any type of reforms, regardless of the pains imposed on the American economy and U.S. consumers.  The crude oil export restrictions, on the other hand, have found new support from a small group of U.S. refiners who profit handsomely from depressed domestic crude prices and the lack of any legal limits on their exports.  As is always the case with protectionism, these groups win and U.S. consumers lose.
There's more of interest at the link, and for an OLS post on the Jones Act, see here.
[ht: CafeHayek.com