SCRAP CAP-N-TRADE AND TAX GASOLINE DIRECTLY:

Crude oil supply far outstrips motorist demand, analysts say: California could see $2.75 a gallon -- and the nation $2.50 a gallon or less -- before July is over. Supplies are growing as people stay off the road even with the summer driving season underway. (Ronald D. White, July 10, 2009, LA Times)

The supply of gasoline in the U.S. was climbing, beating the volume that had built up before prices crashed last year, according to the Energy Department's analysis released this week.

The low demand "was most noticeable in states like California, Nevada and Arizona," said Tom Kloza, chief oil analyst for the Oil Price Information Service, or OPIS, in Wall, N.J., who was predicting the big drop in retail gasoline prices. [...]

Crude oil supplies in the U.S. were running 53.4 million barrels ahead of last year, with 347.3 million barrels on July 3, the Energy Department said. Gasoline inventory rose 1.9 million barrels to 213.1 million barrels.

Here's another opportunity to replace the natural decline in prices with taxes so that we can both hold down consumption and derive revenue from it.

Posted by Orrin Judd at July 10, 2009 10:47 AM