[r51] Dodge Report (6/25/2007)

Monday, June 25, 2007

Start Date: 6/25/2007 All Day
End Date: 6/25/2007

Gasoline prices continue to climb, dominating the media and causing many of us to take a second glance at our pocket books once we fill up. We are slowly experiencing a drop down from the $3 a gallon price, however many are still contacting my office and other leaders about getting assistance for those financially struggling or burdened by the high prices. Some say that we need a temporary fixed price on gasoline and other want to know why two gas stations close to each other have such different prices. 

Well there are a number of factors that affect the fluctuation in gasoline prices but crude oil accounts for about haft the price Americans pay at the pump. Global demand has hit an all time high. Simultaneously, the value of a dollar, compared to the currencies of other high-demand countries, is not as strong, causing more dollars to be spent on a barrel than before. Inflation continues to adjust to a thriving economy. 

Supply and demand are the driving factors of gas prices and the U.S. is particularly at a disadvantage because of the lack of refineries, which creates a bottleneck. There has not been a new refinery built in the U.S. in the past 30 years. The Environmental Protection Agency (EPA) imposes rigorous standards for building new refineries so most oil companies choose to invest in increasing output, instead of constructing new facilities. In addition, during the summer months the EPA requires a special blend of gas called "boutique blends." The special blend reduces sulfur levels so gas will pollute less on hot days but diminishes a refinery's ability to pump out product at peak capacity.  This creates additional supply problems because demand is often at a maximum during the summer months. 

Despite the increase in price and lack of refineries, demand in the U.S. is two percent higher this year than last. One way Hoosiers can save money on gas is to become more conscientious consumers. There are a number of ways Hoosiers can conserve gasoline when they drive. Gasoline mileage decreases significantly the faster you drive. Every 5 mph you drive over 60 mph is like paying an additional 10-cents per gallon. Try to avoid idling your engine; an idling engine gets 0 miles per gallon. Keeping your tires inflated, using overdrive gears, and making sure your engine is properly tuned will help Hoosiers conserve gasoline. If you believe a gas station in the area is gouging prices, file a complaint through Indiana Attorney General's office at www.in.gov/attorneygeneral . Conserving fuel will help Indiana stabilize gas prices.

If you have any additional questions or concerns please feel to contact me at 1-800-382-9841 or e-mail me at h51@in.gov. It is also possible to send letters to 200 W. Washington St, Indianapolis, IN 46204.

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