New data and analysis shed some light on how big oil companies may have driven down the price of gasoline in the run up to the election in order to maintain the status quo.
The Foundation For Taxpayer and Consumer Rights has found that the recent sharp drop in gasoline prices from this year's record highs is steeper than the drop in the price of crude oil, indicating that refiners are taking less profit in order to push the retail price lower as the election approaches. It is a pattern that is also evident, though less sharply, in the autumn of the last two election years, 2002 and 2004.
In essence the analysis shows oil companies may have shrunk their profit margins in the short term on refining operations in order to pump up the electoral hopes of Republicans who receive more than 80% of the campaign contributions from oil companies. A GOP government is much more likely to keep oil company profits high in the long run.
Recent stellar third quarter oil company profit reports (which only show profits through September) don't reflect the October gasoline price drop. Any "October surprise" slip in refining margins will be reflected in the fourth quarter profits reports out in February. But examination of key indicators show oil companies are taking less in refining profit in order to create a more stable political climate during the election.
The pattern of the last three election years is an indication that motorists who smell something fishy in the rollercoaster prices they've endured this year may be on to something. The rise to record high gasoline prices this spring unleashed a wave of justified criticism of bloated oil company profits. Now the price drop in the pre-election period, by a percentage well beyond reductions in the price of oil, smells just as bad.
Americans should trust their gut. Not only about the recent drop in gasoline prices being linked to Big Oil's political agenda, but also about what will happen to gasoline prices after election day if the status quo in Washington DC doesn't change.