Publication

This paper discusses the policy implications of high gasoline prices in the US. This was an important consideration during the debate on major energy legislation, which ended when the President signed the Energy Policy Act of 2005. However, prices continued to surge post-Hurricane Katrina. A large number of factors combined to put pressure on gasoline prices, including increased world demand for crude oil and US refinery capacity inadequate to supply gasoline to a recovering national economy. The war and continued violence in Iraq added uncertainty and a threat of supply disruption that added pressure particularly to the commodity futures markets.