Wednesday, November 08, 2006

Gas Up Before the Inevitable Price Increase

Now that election day is passed, I expect the Republican administration to re-start the filling of the Strategic Petroleum Reserve, which will inevitably drive up gasoline prices.

Most of the economists I know were a little surprised that the country would stop filling the reserve when the prices were already at a multi-year low and the reserves had been depleted already partly due to the Iraq conflict. But as we now know, politics trumps economics, and they needed any weapon in the run-up to the election. Even then, it looks like the artificially-induced lower gas prices weren't enough to stave off congressional defeat.

The only real question remaining in my mind is when they will open the spigot, given the open-ended nail biters in Virginia and Montana to determine control of the Senate. It wouldn't surprise me if for some reason the SPR intakes remain closed until the election is completely resolved.

2 comments:

Anonymous said...

Sounds quite plausible. Phil

Liberal Wife said...

Liberal Wife is doing a happy jig at the final results of the mid-term election. Although our SPR will no doubt be filled with higher-priced gas due to politics as usual, it is my earnest and most fervent hope that the new Congress will be able to halt the unimpeded regress of "politics as usual" by this particular administration.