Rising Gasoline Prices 2012 (CRS Report for Congress)
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| Release Date |
March 1, 2012 |
| Report Number |
R42382 |
| Report Type |
Report |
| Authors |
Neelesh Nerurkar, Specialist in Energy Policy; Robert Pirog, Specialist in Energy Economics |
| Source Agency |
Congressional Research Service |
Summary:
Average national gasoline prices have increased by $0.46 to $3.78 per gallon between the end of December 2011 and the end of February 2012. This is $0.20 higher than the 2011 average annual gasoline price of $3.58 per gallon. In the first half of 2011, unrest in the Middle East and North Africa contributed to higher crude oil prices, which pushed gasoline prices higher. In early 2012, tensions with Iran are contributing to rising crude prices, which again are pushing up the price of gasoline. [â¦] Many of the policies that may address rising gasoline prices are long term. Investments that produce or consume oil, such as new oil fields, pipelines, cars, or factories, are capital intensive and long term in nature. There are limited short-term options available to policy makers to address gasoline price increases. This report briefly covers several short-term options that have been considered by policy makers: strategic petroleum reserve release; gasoline tax holiday; relaxing fuel specifications; restricting refined products exports; limiting financial speculation; diplomatic measures. It is unclear what the price impact of these short term options would be, and they involve various policy trade offs. Potential costs may include national security, fiscal, and public health priorities. An additional set of option focuses on longer-term measures that may prevent negative impacts if gasoline prices rise in the future. Policy makers may choose to focus on measures that encourage efficiency, oil production, and alternative fuels. Pursuit of long-term measures in the absence of short-term measures, to the degree short-term measures may (or may not) be effective, may make it more likely that consumers will suffer from high gasoline prices for the time being. However, higher prices may also provide additional market based-incentive for investments by consumers and firms in efficiency, energy production, and alternative fuels.
