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   No news subject hits closer to home than the price of gasoline.  A lot of people are complaining that the gas and oil companies are gouging the customers who buy the gas.  Gouging means that the seller is charging more than the product is really worth.  People point to the record profits of the gas companies as proof that this gouging is occuring, even accusing the gas companies of price-fixing.  Is this really true?
    For gouging and price-fixing to occur, there would have to be no free market or competiton among the suppliers.  For instance, if you owned the only gas station within 200 miles, you could charge extremely high prices because you would be the only supplier, and anybody whose car got less than 400 miles to a tankful of gas would have to buy from you.  They would have to either pay your high prices or run out of gas.
    This situation doesn't exist in the gasoline market.  From the oil being pumped out of the ground to the gas station, there are literally thousands of countries, suppliers, refiners, shippers, station owners, and traders competing for a share of the market.  This competition actually keeps the price of gas down, not up.
    What has raised the price of gas is basically three factors.  First, supply of gas and refined oil products is tightening because consumption of gas is increasing not only in the United States, but in the rest of the world, especially China and India.  Second, production of gas is not keeping up because not enough oil refineries are being built because of government regulations and environmental activists.  The third factor is OPEC, the Organization of Petroleum Exporting Countries.  They have price-fixed the raw material, oil, at a higher price than it would be in a free market.  If anyone is gouging, it is OPEC, not the gas and oil companies.
    The solution is to drill more oil here in the United States, including offshore in the Gulf of Mexico and in ANWR,  and to allow more refineries to be built to handle the demand.