"Because oil prices today are at least $10 less expensive per barrel than when gasoline prices previously exceeded $3 per gallon, almost all of the price pressure on gasoline can now be attributed to America's continuing -- and increasing -- inability to supply enough refined gasoline to the marketplace," AAA said.
Now this seems like AAA is trying to blame high gas prices on producers. But the real question is what is causing the need for increased production (a movement up the supply curve). Only two things can cause an increase in the price of gas, a decrease in supply or an increase in demand. If refiners are struggling to keep up production, then the recent price increases are clearly not the result of a decrease in supply. So, the answer has to be an increase in demand. I keep trying to tell you it's all your fault.
