Government help in oil/gas prices?

[dentndude2]

Okay, color me stupid, but couldn't the Government release some of the oil we have in reserves to relieve the prices at the pumps?

[firstoftwelve]

yep, when they should be cutting the taxes per gallon...:(

[Rondaben]

They can release from the strategic reserve but they won't. Here's why:

1) if they do it will cause a temporary drop in price at the pump. OPEC will then likely cut production in response and the price will adjust even higher

2) Oil price is not so high because of a supply/demand factor. There is plenty of oil available. You are being distracted by those who say that it is due to "increased demand of developing economies like India and China". Oil, by mandate of OPEC, is denominated in the US dollar. The dollar has fallen relative to other currencies around 15% this year. The Fed is printing money at 15-18 percent per year (no correlation there...nothing to see, move along). Assuming no other outside influences occur like middle east war, economic collapse, major upheaval in the world, etc you can expect the dollar to fall another 15-20% this year if not more. You will be seeing $4 gas within the next 60 days. You will be seeing $5 gas by Christmas. Nothing can stop that from happening as the USD as a currency is in its final life stage.

3) As kidrocxx pointed out, the tax per gallon of gas is going up and will also go up even higher. Most income for local and state is based upon the property tax assessed on homes. Home values are declining at an accelerating rate and so to is the tax base. Will governments cut programs in an election cycle? No. They will find alternative ways to generate revenue. Tax on Gas will make it go higher. Sales tax will be increased making food and other items more expensive.