Gas prices are rising higher, far earlier in the year than usual in the United States.
According to the Energy Information Agency, it cost 34 cents more on average for a gallon of gas in February 2012 than it did one year ago. In fact, in inflation-adjusted dollars, the last time gas prices were this high in the United States was at the beginning of the last century, just as a major war was winding down. It was 1918.
So why are prices jumping?
Contrary to what some in Washington are saying, it’s not due to a lack of domestic production, rampant speculation, or the absence of the Keystone XL pipeline.
In this memo, we explain why gas prices keep going up – and why some of the favored rhetoric to try to solve it are not likely to bring prices down at the pump any time soon.
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