Gas Price FAQ

As a regular commuter across Michigan, I share your frustration with the high price of gas.  Uncertainty about the high cost of fuel makes it hard for families to plan for the year and live within their budget.  I have also heard from many of you about gas price gouging.  Below is some helpful information and resources on this topic and the steps I have taken to help better utilize our nation’s abundant domestic energy resources.

Why do gas prices fluctuate so often?
There are a variety of factors that help determine the general upward trend in gasoline prices and the daily fluctuations in the cost of a gallon of gasoline, including: transportation, distribution, cost of crude oil, refinery processing, marketing, operating expenses, retail station operations, taxes and global demand, the value of the U.S. dolalr, and civil unrest in oil producing nations. The prices paid at the pump reflect these costs and factors, in addition to the costs associated with refiners, marketers, distributors, and retail station owners.

What do we pay for in a gallon of gasoline?

 

                                                                            Source: Energy Information Administration

Crude Oil: The price of crude oil is set on the global market and is the largest factor in the price of gasoline.
Refining: Crude oil is purchased as a raw material by refiners who then manufacture into gasoline.
Taxes: Consumers pay both state and federal taxes on gasoline. Total gas taxes per gallon vary greatly from state to state from lows of 30 cents per gallon to highs of more than 60 cents. In Michigan, drivers are charged approximately 58 cents per gallon in taxes. 
Distribution & Marketing: Once gasoline is manufactured, leaves the refinery and is sent to terminals for distribution to service stations.  Retailers then set the price at the pump based a variety of factors, including recovering the cost of production and distribution  costs, taxes and the costs of marketing fuel to consumers.

What is gas price gouging?
Though there is no universal definition of what constitutes gas price gouging, it is generally agreed that price gouging occurs when a seller prices gasoline at a much higher rate than is considered fair or reasonable.

What should I do if I believe I have been a victim of price fixing or gas gouging?
In Michigan, the Attorney General's Office monitors statewide gas prices to prevent price gouging. 

If you believe you have been a victim, please contact the Michigan Attorney General’s Consumer Protection Division to learn more about your rights:

Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909

1-877-765-8388
(online complaint form)

Fuel-Saving Tips
Follow these tips and guidelines to make sure your vehicle is getting the best gas mileage possible.
• Fuel-saving driving tips from the Federal Trade Commission (FTC)
• FTC: Gas Saving Products, How Successful Are They
• Gas Mileage Tips from fueleconomy.gov

Other helpful resources on gas prices:
• U.S. Department of Energy Gas Price Data
• U.S. Energy Information Administration - Gasoline and Diesel Fuel Update
• Find the lowest gas prices in your area

What is the latest development on the Keystone XL Pipeline Project?
The Keystone XL Pipeline Project would extend an existing energy supply pipeline between Canada and the United States by 1,700 miles.  If completed, it is expected to carry 1.4 million barrels of oil each day to refineries in the U.S—expanding our energy supply as well as reducing our dependence on foreign oil.   It is also projected to create 20,000 jobs immediately with more than a hundred thousand within the next several years.

For the Keystone XL Pipeline Project to move forward, the United States State Departmentwas tasked with giving a recommendation to President Obama on the viability of the Keystone XL Pipeline.  On January 18, 2012, the State Department released their analysisthat the Keystone XL Pipeline was “determined not to serve the national interest.”  I strongly disagree with this assessment.  The Keystone XL Pipeline would create jobs, and lower the cost of energy in America.

The House has voted on multiple bills that would expedite the Keystone XL Pipeline project, and create thousands of jobs for Americans while lowering domestic gas prices, however each time the Senate has voted these bills down.  On February 16, 2012, the House passed H.R. 3408, 237 – 187; this legislation would approve the construction of the Keystone XL pipeline.  Currently, H. R. 3408 awaits action in the Senate.  I will continue to support the construction of the Keystone XL Pipeline, and will push for solutions that will lower the cost of energy prices in America.

Steps taken during the 112^th Congress:
To achieve an "all-of-the-above" energy plan, I am a co-sponsor of the following bills: 

H.R. 1777, Consumer Relief for Pain at the Pump Act (Rep. Robert Latta, R-OH)
Enacts measures that would lessen regulatory burdens, mandates, and prohibitions that artificially increase the price of gasoline such as:
- Removes unnecessary delays in the Gulf of Mexico Outer Continental Shelf (OCS) permitting process
- Allows for the exploration of oil in the Arctic National Wildlife Reserve (ANWR), as well as the waters in the Eastern Gulf of Mexico
- Repeals President Obama’s “Wild Life Policy” that restricts hundreds of thousands of acres from energy development
- Removes barriers to approving the Keystone XL Energy Pipeline to bring critical energy resources from Canada to the United States

H.R. 909, A Road Map to America’s Energy Future (Rep. Devin Nunes, R-CA)
- Expedites the leasing program on the OCS.
- Opens up the Arctic Coastal Plain of ANWR to energy exploration with an expedited leasing process.
- Resumes and codifies the oil shale lease program, and repeals prohibition on government purchasing of oil shale, tar sands and coal-to-liquid technology fuels.
- Mandates the permitting of 200 new nuclear reactors and requires a finalized review of the Yucca Mountain repository.
- Dedicates federal revenue from traditional energy to a renewable energy trust fund for alternative energy technology development.
- Prevents the EPA from regulating greenhouse gases to address climate change.

H.R. 49, American Energy Independence and Price Reduction Act (Rep. Don Young, R-AK)
- Allows for the oil and gas production in a 2,000 acre section of the Arctic National Wildlife Refuge (ANWR) and uses a portion of the royalties to finance renewable energy programs.

I believe Congress needs to get serious about developing an “all of the above” energy policy, and I encourage you to check out my Energy and Gas Prices issue page.

VIDEO

03/20/2012- Rep. Walberg Questions Secretary of Energy on Gas Prices and the Failed Stimulus Program
03/07/2012- Rep Walberg Highlights How American Energy Production Will Boost Economy
06/06/2011- Constituent Mailbag Concerns about Gas Prices
03/30/2011- Walberg Encourages Energy Production Act at Home . . . Not Brazil

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