As gasoline prices increase, the amount of bloviating increases.  Harry Reid said “it isn’t right, we must do something!”  The one thing I can guarantee is that whatever Harry wants to do will only make things worse.

If government price controls are put on gas, the supply will dry up and cause shortages.  One only needs to look at the 1970’s to learn that lesson.  Gasoline prices are based on the price of oil.  If oil rises in price and the price of gas is capped, the amount of money available to invest in improving production and distribution decreases and a supply shortage results.

Focusing on the dollar profits of the oil companies is like looking at a tree but missing the forest.  Gasoline profits are, as a percentage of sales, are much smaller than most industries.  Naturally, as prices rise, profits rise - anything else would not make any sense.

If the government is really concerned about the price of gasoline, the obscene amount of taxes per gallon should be reevaluated.  However, that is not all good either.  If taxes are dropped, more consumption is encouraged and the demand goes up causing further price pressure.

In short, the only logical solution is to let the market regulate the price of gas through the laws of supply and demand.  That is the only fair method to allocate finite resources.

If the motorist really wants to assess all blame for high prices that can be assessed, he must look to himself. Americans drove 3 percent more miles this March than they drove in March 2006. That rising demand at a time of limited supply would all but guarantee high prices even if refiners were going all-out.

If Americans want to bring down prices, all they need to do is drive less. If everyone ceased driving one day a week — car-pooling, electronically commuting or taking mass transit instead — demand would drop 15 percent. Universal adherence to the principle cannot be expected, but much smaller drops in demand have been known to bring significant price cuts.

Analysts report that the outlook for lower prices is good. As refineries come back on line or increase production, supply goes up and prices moderate.

Democratic leaders in Congress, embodied by U.S. Senate Majority Leader Harry Reid of Nevada, champion conservation but apparently do not understand that high prices are a necessary incentive to the conservation of energy. If energy is cheap, people will use it extravagantly. (source)