We're still a few weeks away from summertime driving, when complaints about "price gouging" will bloom. But just who is doing the gouging? Supply and demand rule, but governments intrude through a variety of means, pushing up prices even more.

Taxes

Start with the fact that federal and state taxes levied on average, 46 cents a gallon in taxes in 2006. Gas taxes may be defended and even promoted as an example of user fees, but that 46 cents includes money diverted to highly inefficient mass transit, not to mention pork projects with no relation to transportation at all. To put things in perspective, governments "profit" more from taxes than oil companies profit from the sale of petroleum.

Ethanol and clean air mandates

Governments impose requirements on the chemical makeup of gasoline that is sold by retail outlets. Two Cato Institute scholars say that last year, these requirements added up to 60 cents a gallon to gas sold in California.

Minimum Pricing Laws

If gas prices are too low, surely politicians would look favorably on retailers who offer lower prices, perhaps pushing the market lower?

No. At least not some of them.

In Minnesota, Wisconsin, and other states, it's actually illegal to sell gasoline at a discount. For any reason. Under public policy, states actually prevent you from buying cheaper gas! Economist Phil Miller has more, as does the Taxpayers League Foundation of Minnesota.

Demagoguery

Finally, Wisconsin's Governor Doyle has proposed an extra tax on oil companies. Remarkably, Doyle claims that the companies will not be allowed to pass along the cost of the tax to customers. As the Wisconsin Policy Research Institute demonstrates, motorists, not the companies. will in fact shoulder the burden.