Interesting how people actually believe that raising the price of gasoline will drive down consumption and somehow avert shortages . . . . . the only thing that high gasoline prices do is make oil companies all along the production chain (and by extension the governments that tax them - which are not necessarily in the US) richer.
A huge percentage of the driving that is done is perceived by the drivers to be 'necessary'. They will continue to use their vehicles, reducing their spending in other areas (just have a look at Starbuck's sales profiles) to compensate. So since there is no downside for the oil industry to raising prices, the oil companies do it with impunity. And because tax revenue is at least partially based on the selling price (2.5% state tax in Cali plus some other minor bits, plus any local taxes) there is no incentive for governments to regulate pricing and supply. Unfortunately every other business is paying the price for this (and by extension, consumers).
Don't believe me? Run a chart of the REAL prices paid for oil wholesale (lately the benchmark pricing has been running abot $90 for West Texas crude, but it has been selling for a discount of about 50% - the same applies to Alberta tar sands crude which is used to supply much of the US - and THAT is hanging around at about $70 and selling for $35) and chart it against the retail price of gasoline, noting that demand has dropped, and there have been NO shortages of gasoline or other refined petroleum products and the volatiles from US refineries can't be profitably shipped outside North America, gasolne prices are at an all time high.
By way of example; When oil hit $145.29/bbl on July 3, 2008 the retail price of gasoline in Montreal (where we actually have LOTS of spare capacity - enough that they are closing a local refinery due to excess capacity) hit $1.43/litre (US$5.32/Gallon using the exchange rate of the day) in response and today Montreal prices are $1.49/litre (US$5.78/gallon at today's exchange rates), even though the crude cost is less than a quarter of what it was back then.
And yet everyone still drives the same as they did. But their cars don't get maintained, homes don't get maintained, people don't buy clothing eat or out as much and they've cut back their spending in every other area to compensate - and the ripple effect is that governments see less tax revenue on profits from businesses and sales taxes on durables, so they have to crank up property, income and sales taxes and borrow more. At least interest rates on those loans and bonds are low . . . . . for now.
