Why Are Gas Prices So High? 
By Congressman Bill Posey
Every time I pull into the gas station to fill-up I’m angered by the sharp increase in the price of gas. It's hard to believe that in January 2009 gas was $2.00 a gallon. I’ve spent some time studying this and here are a few things to keep in mind when it comes to the price of gas:

Dependence on Foreign Oil: According to the Energy Department, last September the U.S. imported 1.5 million barrels of oil every day from Saudi Arabia. That’s 17% of all the oil we use. Another 8% is imported from Venezuela, 6% from Nigeria, 5% from Iraq, 3.3% from Angola and 1.5% from Algeria. That amounts to 40% of all the crude oil we use. At the current price of about $100/barrel, that amounts to hundreds of millions of dollars each day going to countries that don't like us. That dependence puts us at risk.
Taxes and Production Costs: Federal and state taxes make up about 16% of the price of a gallon of gas according to the Energy Department. With the average price of gas today at $3.55, that amounts to about 50 cents per gallon. Another 5% is for distribution and marketing costs. Less than 5% is for refining and profit. About 72% is the cost of a barrel of oil as purchased by the refinery, which is driven by world demand and includes most of the profits.
Regulations: Mandates by the EPA impose additional costs on consumers. There are currently 18 different federally mandated blends of gasoline often referred to as “boutique fuels.” When you add in some state and local mandates there are 26 different blends. These blends are not interchangeable. They increase distribution costs and force refineries to shut down in order to make a unique blend, which causes a reduction in supplies and further increases costs. I support legislation to reduce the number of mandated blends as a way to lessen the pain at the pump.
Supply and Demand: While the slow economy has reduced demand in the U.S., demand is up in many other parts of the world where economies are growing. High demand from other countries raises the worldwide price of oil. This is a growing concern and it is why we should make it a priority to open up our own domestic sources of energy. The Keystone pipeline, which the Administration has blocked, would have cut in half our daily imports from Saudi Arabia. I believe this pipeline is a priority for reducing our dependence on Middle East oil and will continue to work to see it built.
Inflation: Since oil is traded on the world market in U.S. dollars, inflation is also a factor. Over the last 15 years, the dollar has lost nearly 40 cents in value. In other words, it takes a $1.40 from today to purchase $1 from 1997.
But we’re not helpless. We can change this situation by putting in place an energy policy that encourages independence, green-lights major energy initiatives, creates American jobs and keeps our nation focused on new technologies. By ending excessive overspending we can also keep inflation lower and the price of oil and gasoline lower.
Originally published in February's edition of the Barefoot Tattler