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00:11 Jane Van Ryan introduces her guest, Trilby Lundberg, publisher of the Lundberg Survey on gasoline prices who will share her thoughts on the recent rise in gasoline prices.

00:35 On May 4, the Lundberg Survey found that the price of regular gasoline had reached an all-time high. Prices have risen 15 cents in the past two weeks and have gone up 55 cents this year.

01:10 The average price of diesel fuel is currently $4.29.

01:25 Several factors have led to high gasoline prices. Crude oil accounts for 80 percent of the retail gasoline price, therefore increases in the price of crude oil directly affect gasoline prices. Additionally, compliance with government environmental regulations and higher labor expenditures have raised the cost of refining gasoline. Finally, companies require a wider profit margin to invest in the supplies necessary to meet future demand.

03:10 Crude oil prices have risen largely because of the dramatic spike in demand from developing Asian countries. Meanwhile supply has become constrained because 80 percent of the world’s oil is now in control of state-owned oil companies who have not sufficiently invested in necessary infrastructure to smoothly bring the supplies to market.

04:11 Some consumers believe industry profit margins are too high. What are your thoughts?

04:23 Refining margins are very low and we have seen cases of foreign suppliers rejecting the market because of the low margins. Some critics would like to see increased taxes on gasoline to deter use. These proposals will simply place a large burden on consumers and the economy as a whole.

05:50 The Lundberg Survey began in the 1950s on the West Coast. Price was typically 20 cents per gallon at that time. The survey’s subscribers were originally oil companies looking for more information about the market, and still account for a large number of subscriptions. In addition to petroleum companies, equipment suppliers and other supporting organizations often request reports and information.

07:07 The survey data is collected by manually visiting stations across the country and viewing the current price at the pump. This allows the survey to be broken down by brand and station type.

08:30 Trilby believes that government involvement in the industry is already too great. Trilby reports that after price-gouging legislation was proposed in Congress, many station owners indicated that they would rather face jail than run out of supply during an emergency because of a suppressed price. Other station owners responded that they would close in the event of an emergency out of fear of unintentionally breaking the law.

09:15 The government should work to increase supply, both in domestic crude oil and in refining capacity.

09:37 Most proposals for gas-tax holidays are abandoned before they are implemented. When they have been implemented in the past, consumers tend to become angry if there is not an immediate reduction in price. Lawmakers should be focusing on more long-term solutions.